189 allegations of procurement corruption were investigated © Darren Stewart/Gallo Images via Getty Images
189 allegations of procurement corruption were investigated © Darren Stewart/Gallo Images via Getty Images

Political pressure in PPE contracts, say investigators

11 February 2021

South Africa’s Special Investigation Unit (SIU) has found evidence of political pressure, price inflation, and fraud in many of the PPE contracts signed in response to the coronavirus outbreak.

The SIU’s investigation came about after a flood of allegations surrounding PPE procurement and hospital equipment such as beds.

It has implicated 25 officials in PPE tender irregularities worth millions of rand.

SIU advocate Andy Mothibi said the investigation had revealed that political pressure played a role in the awarding of tenders to particular companies and that 189 allegations of procurement corruption had been investigated.

“The report also found that de-registered companies were awarded tenders worth millions of rand, while in other instances, specifications were ignored and sub-standard quality products delivered,” Mothibi said during a media briefing.

“Our report found that there was no attempt to negotiate with suppliers in bringing prices within the thresholds provided by Treasury.

“This resulted in overpayment for goods. The departments lack basic control measures that will establish correct product delivery. In several instances, we found under-delivery of items.”

Some of the tender-winning companies were not registered on the Central Supplier Database or had only been registered days before the country was placed in a state of national disaster, the investigation found.

Among the investigation’s findings was evidence of tax fraud, the use of shell companies to win multiple contracts and cases where prices had been inflated by up to 500%, Mothibi said.

“It appears that persons in positions of authority in some state institutions believed that the declaration of the state of emergency meant that all procurement is automatically conducted on an emergency basis,” he added.

The investigation looked into more than R13bn out of a total expenditure of R30.7bn. It is to wrap up in six months.

So far contracts worth R365m have been sent to a special tribunal set up to hear cases, while the unit expects to recover around R260.6m in cash or assets.

The SIU has also recommended disciplinary action against certain officials involved in the irregularities. Some officials have resigned following the investigation.

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