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Free State sites to be probed

Nicola Mawson
By Nicola Mawson, Contributor.
Johannesburg, 12 Mar 2013
The overspending on the Free State Web sites should be repaid and executive officials held to account, says the Democratic Alliance's provincial leader Patricia Kopane.
The overspending on the Free State Web sites should be repaid and executive officials held to account, says the Democratic Alliance's provincial leader Patricia Kopane.

Amid further allegations of financial mismanagement surrounding the multimillion-rand Free State provincial government Web sites, it has emerged that the public protector is assessing two complaints lodged in connection with the tender.

Once Thuli Madonsela's assessment is complete, in about a week, she will decide whether to take the matter further and launch a full investigation, a mini probe, or that the complaints are baseless. In the past, the protector has referred criminal matters to the South African Police Service and has also ordered the return of monies irregularly spent.

In addition, the auditor-general is set to audit the tender, a process which should be complete by the end of July.

The cost of the 38 Web sites built by a consortium of Cherry Ikamva Jugganaut is officially around R47 million over two financial years, although World Wide Worx MD Arthur Goldstuck puts the expense at R97.8 million, based on the vague three-page award announcement.

News of the sites was revealed last Monday, in a Sowetan report that pegged the cost at R140 million, leading to public outrage, with calls for the money to be paid back. Industry insiders have argued that the province did not get value for money and that the sites are riddled with security flaws.

Now the official opposition, the Democratic Alliance (DA), has alleged the Free State premier, Ace Magashule, "is using government marketing contracts to channel millions of public funds" to the company that built the sites. It and a member of the public have asked Madonsela to investigate.

Image issues

In a statement issued by the party's provincial leader, Patricia Kopane, the DA alleges that, in exchange for the "enrichment," the Letlaka Group, headed by businessman Tumi Ntsele, "is selling the premier's image to the public during a time of service delivery collapse in the Free State".

Letlaka owns Cherry Online, which does not have a Web site, as well as several media publications.

In the last three years, Magashule and director-general Elzabe Rockman "have awarded several lucrative government advertising contracts to Ntsele under irregular circumstances", the DA alleges. Letlaka this morning declined to comment on the party's allegations.

"Ntsele's wealth has been created overnight in the process, transforming his company from a small start-up to a group with several communications arms," alleges the DA.

Among the contracts the DA alleges the company was awarded:

  • R2.6 million for event management of the premier's 2009 state of the province address.
  • A R4.175 million advertising contract to Letlaka-run The Weeklynewspaper without going to tender.
  • R300 000 a month from November 2010 for printing and distribution of government marketing material.
  • An estimated R1.6 million on advertising in the past three months in The Weekly for 88 advertisements.
  • R12 million a year on Letlaka-managed Hlasela TV, which is broadcast to 100 public buildings in the province.

Kopane says Magashule should be removed from office, and Rockman, who has just been promoted to finance MEC, should be held accountable as the accounting officer. She says the money that was overpaid should be refunded and channelled into areas where it is needed, such as roads and healthcare.

Should neither the AG probe, nor the public protector investigation lead to the desired outcome, the DA will open a criminal case, says Kopane. She points out that several low-cost houses, at R70 000 each, could have been built instead of the Web site, and that the province's roads are falling apart.

Public protector spokesperson Kgalalelo Masibi explains that the complaints still need to be assessed, which may or may not lead to a full investigation. She says the assessment should take "a week or so".

Once findings have been completed, the protector can decide on remedial action, says Masibi. The AG's office says it has not audited the tender yet. "The matter will be included in our (normal) annual regularity audit, which is expected to be completed by the end of July."

Procedure followed

Mondli Mvambi, the province's director of media strategy and liaison, did not respond to the DA's allegations. He previously said that, "as the procurement process was initiated during the 2011/12 financial year, the process was already included in the regularity audit of the Department of the Premier".

Mvambi said the outcome was unqualified with no findings. "It is standard practice that the office of the auditor-general will also include any expenditure incurred in respect of this project as part of its regularity of the current 2012/13 financial year. It does not require a request from the Democratic Alliance to conduct its standard procedures and practices."

All processes, as prescribed by the Public Finance Management Act, were followed in procuring the services of the appointed service providers, said Mvambi.

In addition, the contract for the public information platform of the Free State provincial government, Hlasela TV, was actually awarded to Bombenero Productions and not the Letlaka Group, said Mvambi. "Ownership of these two service providers can be verified by a basic search of available public information."

The provincial government remains committed to its provincial communication strategy, which has among its aims to promote media diversification and the support of community media in all sectors, said Mvambi. "This does not constitute 'buying media influence', but enables the provincial government to communicate with Free State communities through a broad range of accessible and relevant media platforms".

Mvambi says the province welcomes the "constructive" criticism of the sites and that it is working at addressing issues raised, such as downtime during high traffic. "We reiterate that this project is a first of its own kind as it will integrate the 38 Web sites of the broader provincial and local government sector."

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