State’s Smit Amandla contracts ‘irregular’

AN ERNST & Young forensic report confirmed “substantial evidence of irregular contracts” awarded to shipping company Smit Amandla Marine (SAM) between 1995 and March this year, the Department of Agriculture, Forestry and Fisheries (Daff) said last night.

Acting director-general Sipho Ntombela, who will release the report in Parliament today, said in a statement that he had received the forensic report “commissioned to probe procurement processes and systems in the fisheries branch” of the department.

The report revealed that “the agreement concluded in 2005 and subsequent extensions between SAM and the department failed to comply with the tender board regulations with departmental procurement policies, National Treasury regulations, income tax regulations and also the Public Finance Management Act”.

“As an example there was a contract extension entered into worth millions of rand by [a] mere letter without any proof of any tender process followed or supporting documentation,” the statement reported.

Contracts signed in 2000, 2005 and 2010, Ntombela noted, “were irregular and were deliberately drafted to have maximum benefit for SAM amounting to (about) R1.6 billion to R2 bn”. He said the state had no protection “in any of these contracts and the available evidence suggests complicity and corruption between government officials and SAM”.

SAM director Sithembiso Mthethwa said: “We dismiss these outrageous allegations and note with dismay that after more than six months, Smit Amandla Marine has not been approached by either Daff or any investigating body to respond to these allegations, despite… requests for dialogue.”

But Ntombela said: “Invoices worth up to R600 million have recently been uncovered hidden away from the investigators and could indicate more extensive defrauding of the state. Furthermore, payments were made to SAM as recently as after the termination of the contract after March 2012.”

Last week SAM regained control of a state marine vessel after losing the contract to manage the fleet of marine research vessels to Sekunjalo.

After SAM brought an interdict against Sekunjalo, the latter withdrew its preferred bidder status for the R800m tender. SAM alleged a conflict of interest as Sekunjalo had a fishing subsidiary, Premier Fishing.