Madonsela flags ‘under the table’ tenders
The “R6 million bachelor pads” built for security personnel near President Jacob Zuma’s home at Nkandla have raised questions about the enormous economic distortions caused by “under the table” tenders, Public Protector Thuli Madonsela said in Sandton on Friday.
Madonsela, who was speaking at a corporate breakfast hosted by the Moshal Scholarship Program, said corrupt tenders created an “unlevel playing field” for the government and industry.
The Moshal Scholarship Program helps students from disadvantaged backgrounds who would not otherwise get a bursary and obtain high-quality, sought-after degrees that lead to successful careers. The programme provides financial assistance, soft skills and mentoring.
“When the media was talking about bachelor pads for soldiers, I said: ‘Have you seen those three-bedroom houses? They cost R6 million per house,’” Madonsela said.
“This is not an anomaly. It is a systemic problem when it comes to these contracts or tenders that are issued under the table.”
Madonsela visited Zuma’s home in Nkandla as part of her investigation into whether state money was abused for security upgrades at the estate.
In 2014, she found that President Zuma and his family unduly benefited from the R246 million project to upgrade his home. Questions were also raised about 21 houses built for security personnel on the outskirts of the property, which cost R6 million each.
Madonsela said corrupt businesses “do not pay kickbacks from their own pockets”.
“Their arrangement is to inflate tenders or contracts beyond recognition. Something for R20 million will be R20 billion,” she said.
Madonsela said the risks attached to corruption were enormous for businesses.
Often, a company that has been involved in a corrupt tender will have a project in place, but will have to stop it when a lawsuit emerges or the Public Protector will make a finding against it.
“You are granted the tender today. You have all your ducks in a row, but as you take on the project, a lawsuit starts or we pronounce against it,” Madonsela said.
The cost of corrupt tenders to business, however, was “nothing” compared with the cost to government.
“It makes the cost of public sector government prohibitive,” Madonsela said.