THE DEAD BID­DING FOR CON­TRACTS IN S. AFRICA

New Straits Times - - Business -

PRE­TO­RIA: South Africa’s Na­tional Trea­sury has dis­cov­ered about 12,000 dead peo­ple in its reg­is­ter of com­pa­nies that do busi­ness with the state.

This was among the out­comes of a clean-up of the in­for­ma­tion sys­tem that the Trea­sury’s pro­cure­ment of­fice un­der­took as the gov­ern­ment bat­tled to rein in spend­ing, said Schalk Hu­man, the unit’s act­ing head.

It also iden­ti­fied about 14,000 state em­ploy­ees who were listed as di­rec­tors of com­pa­nies that were awarded state con­tracts in vi­o­la­tion of reg­u­la­tions.

“We will re­port on them even if we drag those 14,000 to court by their hair and lock them up,” said Hu­man, here.

Fight­ing graft and achiev­ing sav­ings have be­come even more nec­es­sary since two rat­ings com­pa­nies down­graded the debt of Africa’s most-in­dus­tri­alised na­tion to junk.

Fraud and in­flated prices from sup­pli­ers con­sumed as much as 40 per cent of the state’s 600 bil­lion rand (RM194.216 bil­lion) bud­get for goods and ser­vices, said Hu­man’s pre­de­ces­sor, Ken­neth Brown, last year.

Some peo­ple set up com­pa­nies with fake doc­u­ments or the iden­ti­ties of dead cit­i­zens and used th­ese en­ti­ties to ten­der for a project at higher prices, mak­ing their le­git­i­mate busi­nesses seemed as if they were pitch­ing for the same work at cheaper rates, said Hu­man.

The unit’s in­ves­ti­ga­tions into some gov­ern­ment projects have pit­ted it against some of the coun­try’s most-pow­er­ful politi­cians. Last year, it crit­i­cised state-owned power util­ity Eskom Hold­ings SOC Ltd for re­sist­ing ef­forts to re­view its coal-sup­ply con­tracts with Tegeta Ex­plo­ration & Re­sources Ltd.

Last year, Eskom paid Tegeta 659 mil­lion rand for coal be­fore re­ceiv­ing it, which the power pro­ducer said it did to en­sure sup­ply.

“Com­pet­i­tive pro­cure­ment pro­cesses were not fol­lowed, the con­tract man­age­ment is weak, you are pay­ing for sub­stan­dard goods, and the is­sue of pre­pay­ment is un­heard of,” said Hu­man.

The re­port has yet to be of­fi­cially re­leased. Bloomberg

BLOOMBERG PIC

Fraud and in­flated prices from sup­pli­ers con­sumed as much as 40 per cent of South Africa’s 600 bil­lion rand bud­get for goods and ser­vices last year.

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