'A shocking' R34.9 billion of 'irregular' spending around public works in South Africa

Will Green is news editor of Supply Management
30 September 2014

A review has uncovered R34.9 billion (£1.9 billion) of “irregular expenditure” around public works in South Africa.

Minister of public works Thulas Nxesi said the “shocking” figure had come to light following a review of around 1.3 million transactions since 2009, some of which had their origins in previous years going back to 2001.

Nxesi said R1.1 billion (£60 million) of the spend, which took place in the Department of Public Works (DPW), was being investigated for fraud and corruption but an “irregular transaction does not necessarily mean that fraud has been committed” or that money was “lost or wasted”.

Issues that have been uncovered by the review included tenders not being advertised properly, a minimum number of quotations not received, emergency procurement used for non-emergency situations, lowest quotes not being selected, incomplete documentation and incorrect approvals.

In a briefing to the media, Nxesi said since 2009 more than 100 cases of fraud and corruption involving more than R1.1 billion were being “finalised” or investigated and “several people, including former DPW officials, will appear in court to face charges arising from misconduct and corruption”. He said six DPW officials had been sacked since 2012 for misconduct.

Nxesi said the Special Investigating Unit was also looking into an energy company that was paid R32 million (£1.7 million) “for services it did not render” and 13 companies accused of “transgressions ranging from procurement process not being followed to incorrect supplier being appointed”. A further 23 firms are being investigated, including 15 in connection with “procurement irregularities” arising from the upgrade of president Jacob Zuma’s Nkandla residence.

Nxesi said R22.6 billion (£1.2 billion) of the irregular expenditure, 65 per cent, took place between 2001 and 2009/10, and since 2010 it had reduced.

He said the review took place as part of a turnaround plan for the DPW, which includes the establishment of the Property Management Trading Entity to improve management of state-owned property.

“As the efforts to rebuild the Department of Public of Works start yielding fruit, the campaign to eliminate fraud and corruption from DPW ranks continues in earnest,” he said.

 

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