Communications minister Siphiwe Nyanda is in the spotlight for the second time this week, after it was revealed his company received yet another lucrative government tender.
The Democratic Alliance (DA) in Gauteng has uncovered that General Nyanda Security Risk Advisory Services (GNS) has benefited to the tune of R67.8 million from a contract to provide security services to the Gauteng Department of Roads and Transport.
GNS is 50%-owned by Nyanda, and this is the second such tender to come to light recently. This week, Transnet said it had fired two senior managers at its freight division after a contract worth a total of R55 million was irregularly awarded to GNS.
Jack Bloom, corruption spokesman for the DA, in Gauteng, says the contract was revealed by a written reply to his questions from Gauteng roads and transport MEC Bheki Nkosi.
Bloom has reported the awarding of the deal, which was done without a proper tender process being followed, to the auditor-general for investigation.
The auditor-general has responded, saying: “We will follow up your concerns raised and, if deemed necessary, we will report on it in our 2009/10 audit report.”
At what cost?
service, cannot easily be provided by another company, and is urgent.
However, he says “security companies are a dime a dozen”. According to Nkosi's reply, “a contract relating to services of risk management, advisory services and security services” was awarded to GNS, on 25 October 2007.
Bloom says the tender was open-ended and had no fixed value. He is concerned that taxpayers may have been overpaying for the contract, because there was no open tender, which would have allowed for competitive bids.
“The service provided by GNS could have been provided by many other companies, at probably less cost,” he says. “This was a huge amount to pay for security over a two-and-a-half-year period... it's probably wasteful expenditure as well.”
Conflicted
In addition, because of Nyanda's position in government, his involvement in the security company is a “conflict of interest”, says Bloom. He adds that the latest deal could be one of many. “Who knows, maybe there are other government contracts.”
The DA is questioning the degree to which Nyanda - as a significant shareholder - was aware his company had tendered for these contracts. It also wants to know if he “was privy to information or able to use his position in government to influence that decision”.
“Nyanda, as a senior public official, needs to satisfy the public that he played no part in this [the Transnet] episode,” says the opposition party in a statement.
The minister has previously denied being involved in the running of GNS.
His spokesman, Tiyani Rikhotso, says: “The question of a conflict of interest does not even arise. My understanding is that the company concerned was allegedly awarded the contract in 2007, two years before he was appointed minister.”
According to the latest Parliamentary register of interests, Nyanda is a 50% shareholder in GNS, but there is no value attached to his stake. His only listed benefit from GNS is a driver for general household tasks, the register indicates.
The minister has also recently come under fire for his lavish spending at a Cape Town hotel, apparently because his official residence was not fit for occupation.
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