Bhisho probe into R389m tender
Public Works paid double for mobile schools says report
THE Eastern Cape department of roads and public works (ECDRPW) is being investigated by the Premier’s Office – following a damning Treasury report concerning a R189-million tender, that doubled to R389-million.
This follows the appointment of three companies who won tenders to erect mobile classrooms in various schools in the province.
Initially, the work awarded to the companies was worth R189-million.
However, a confidential National Treasury report released in January last year reveals how the department, ended up paying R389-million – double the amount tendered for.
One of the companies was awarded work to the value of R84 543 213 to construct 214 mobile classrooms and eight science labs in 72 schools.
Another company was awarded work to the value of R44 293 705 to erect 105 mobile classrooms and 11 science labs in 31 schools.
The report stated:
●One of the companies ended up being awarded R131 032 719;
●Another was awarded R85 035; and
●A company by the name of Kwikspace was awarded R163 346 249 according to the report.
The report notes that Kwikspace was given an advance payment to the value of R99 938 411. “The advance payments made to Kwikspace . . .were not in line with the provisions of Treasury regulations in that there were no guarantees by 674 Kwikspace.” Kwikspace regional manager, Glen Moss, labelled the report “rubbish” saying the exercise was nothing more than a witch-hunt, as they were not given a chance to state their side of the story.
“[In the agreement] there was an escalation clause for pricing. If they came and asked us, we could have taken them through everything. The report is not a true reflection, facts are not correct,” Moss said.
He said the contract allowed for an upfront payment in the event that they issued a guarantee, which they did not do. “At no point did Treasury approach us.”
The report further notes that some payments were made without supporting documents. It also pointed out a possible conflict of interest in that a former public works general manager was subsequently employed by Kwikspace.
Moss said they had approached public works’ former general manager way after they had finished the work. The National Treasury report stated that proper record-keeping of invoices and other supporting documentation relating to the project were not maintained by public works. “We found that no reconciliations were performed to ensure proper accounting of budget, advance payments and expenditure,” it stated.
Apparently, there was a directive for service level agreements to be signed between the department and service providers but none was available when investigations were done by National Treasury.
“A SLA (service level agreement) between ECDRPW and service providers must be entered into before commencement of any project to protect the State against litigations by service providers,” the report reads. It also recommended that the department initiate a civil recovery for irregular payments to an amount of R54 442 712 from Kwikspace.
The report also states that in one of the schools, West End Primary in Port Elizabeth, where Kwikspace was supposed to deliver two classrooms, there was no completion certificate.
However, Moss, showed the Dispatch a signed letter apparently from the school’s principal, confirming that two classrooms were erected.
One service provider, according to the document, received an advance payment of R100 349 836 during March 2012. “A payment of R8 687 572 in respect of eight schools was made with absolutely no delivery of any structures or re-allocation to other schools,” the report reads.
The National Treasury recommended that one of the companies’ be referred to police for investigation. It is not clear if this was followed by public works department.
Public Works spokeswoman Vuyokazi Mbanjwa said: “I suggest that the matter be best responded to by Treasury and/or OTP (office of the Premier) as you also note that it is still under investigation”.
Meanwhile, one of the service providers received an advance payment of R60 969 372. The report recommended that public works should initiate recovery processes for irregular payments to an amount of R20 799 087 made to another firm. Payments were broken down into:
●R1 333 577 for payments made to the company in excess of invoices;
●R17 212 566 for payments made not linked to invoices and;
●R2 252 944 for items paid where there was short delivery.
The project is part of questionable public works projects that are under scrutiny after private forensic investigators iFirm was appointed to institute a probe early this year. The Dispatch was unable to contact the other two firms implicated in the probe.