SIU probes contracts for PPE worth R40.2bn

The government’s corruptionbusting unit was investigating allegations related to the irregular procurement of Covid-19 personal protective equipment (PPE) with a contract value of R40.2bn by end-April.

This figure was contained in the six-weekly report that the Special Investigating Unit (SIU) submitted to President Cyril Ramaphosa on April 30, SIU head Andy Mothibi told members of parliament’s justice & correctional services committee on Tuesday.

Ramaphosa ordered an investigation into allegations of PPE corruption. There was widespread public anger after news reports alleged that politically connected individuals had lined their pockets with the state’s money during the pandemic. It also allegedly involved the president’s spokesperson, Khusela Diko, and led to the dismissal of former Gauteng health MEC Bandile Masuku.

Mothibi said in a presentation to the committee that the cases the SIU had finalised or those that were under investigation

represented 94% of the total number of cases presented to it, with 6% still to be commenced. New allegations are also coming forward. “We have made significant progress and impact,” Mothibi said.

SIU chief legal counsel Jerome Wells said that 69 cases with a contract value of just over R7bn had been adjudicated by end-April by the special tribunal, which was set up to fast-track the adjudication of corruption cases. Following the judgments in favour of the SIU, contracts for PPE were cancelled.

Wells said there were 15 PPE cases with a value of R365m pending before the tribunal, which had handed down 13 preservation orders over a period of eight to 12 months and also two forfeiture orders totaling in excess of R44m. Bank accounts of officials where money was paid by service providers have been frozen.

Wells noted that the number of cases finalised by the special tribunal was significantly higher than the high court and the cases were dealt with much more expeditiously. “We continue to see the value of the special tribunal,” he said.

Mothibi said the fusion centre, which brings together law enforcement agencies as well as the SA Revenue Service and the Financial Intelligence Centre to co-ordinate the fight against corruption had been invaluable in the SIU investigations into the Gauteng health department, and now in the Gauteng education investigation.

On preventing corruption in the government’s R4bn vaccination rollout programme, Mothibi said the SIU had shared its experiences of PPE irregularities with the interministerial committee under deputy president David Mabuza, with a view to assisting with risk mitigation.

Committee chair Bulelani Magwanishe said the committee should seek the intervention of Ramaphosa to ensure that the SIU is paid the R531m owed to it by the three spheres of government and its entities.

Mothibi told the committee during a briefing on the SIU’s annual performance plan that as at end-March 2021, R459m of the R531m was owing for longer than 121 days. National departments owed R134m, national entities R139m, the Eastern Cape R82m, KwaZulu-Natal R55m and Limpopo R48m.

National and provincial departments and municipalities investigated are supposed to pay the SIU for the cost of the investigation but they often resist doing so on the grounds that they did not ask for it and had not budgeted for it.

SIU CFO Andre Gernandt said the Treasury had written to all the national departments and municipalities to assist the SIU in its debt recovery attempts but this had not borne any fruit yet.

He noted that in 2020 the SIU recovered only about R75m in debt, compared with the previous year’s R355m.

Mothibi assured MPs that the SIU was in a sound financial position but if the outstanding debt was not effectively addressed, “it has a serious potential to affect our operations going forward”.

He said the SIU had begun engagements with the auditorgeneral, Tsakani Maluleke, for the SIU to be considered as a creditor in the audit of state entities. The SIU wants an audit finding if state institutions do not pay their debts to it.

The SIU will receive a transfer from the government of more than R400m and it budgets to spend R908m this year. Gernandt said it plans to increase the number of its employees from 554 to 668 to cope with the aggressive growth in presidential orders to launch investigations.

Mothibi said the highest number of cases submitted to the SIU (44%) originated from Gauteng, which is the most densely populated province, followed by KwaZulu-Natal at 13% and the Western Cape at 10%.

The SIU anticipates potentially recovering R300m in cash and assets in 2021/2022, and R1bn in contracts or administrative decisions or actions set aside after being deemed invalid and to prevent R500m in losses.

It aims to submit 25 cases to the special tribunal and anticipates submitting 18 reports to Ramaphosa arising from its investigations.

THE SIU WILL RECEIVE A TRANSFER FROM THE GOVERNMENT OF MORE THAN R400M AND IT BUDGETS TO SPEND R908M THIS YEAR