Minister puts ‘emergency’ R60m abalone deal on ice

THE government is investigating a “suspicious” emergency contract to process and market the state’s stockpile of confiscated abalone — about 90 tons worth R60-million — awarded to a previously unheard-of company.

Minister of Agriculture, Forestry and Fisheries Senzeni Zokwana told the Sunday Times this week that he had suspended the contract after allegations of tender irregularities in the appointment last month of Johannesburg-based Willjarro.

The three-month contract involves processing and marketing poached abalone seized by police, previously handled by I&J subsidiary Walker Bay Canners in Hermanus.

The minister declined to divulge the nature of the allegations against Willjarro.

“The legal documents are with our legal unit — we can’t talk more on the allegations,” Zokwana said via his spokeswoman, Bomikazi Molapo.

The minister’s move came the day after a rival abalone marketing company, Shamode Trading and Investments, approached the High Court in Cape Town for an urgent interdict to have the emergency contract set aside. According to court documents:

The appointment of Willjarro did not follow Department of Agriculture, Forestry and Fisheries supply chain management procedures, and there was no need to issue an “emergency” contract;

The processing and marketing tender was not advertised;

The emergency contract allows Willjarro to market the processed abalone and earn a hefty commission. Previously, processed product was auctioned to the highest bidder;

Willjarro landed the contract without having a licence to operate a fish processing establishment; and

Key department officials apcomply peared to be unaware of the contract.

Matters came to a head this week when Willjarro was prevented from exporting a four-ton consignment of processed abalone to the Far East.

But the company continued to trade out of a processing factory in Gansbaai despite the suspension of its contract.

In an affidavit submitted to court, Shamode director Monique Larry said: “My initial reaction [to the contract] was one of amazement and disbelief. I could not accept that the new abalone processing contract would have been awarded without any fair procurement system being followed, and without any attempt to UNDER SUSPICION: Even though Willjarro’s contract to process and market abalone was suspended, the company continued to trade out of this processing factory in Gansbaai with the requirements of the supply chain management policy.

“The company Willjarro was completely unknown to anyone in the local abalone processing marketing industry.

“To the best of my knowledge they had never previously attended or bought produce at any of the previous auction sales.”

Willjarro spokesman Gershwin Ramazan said he was flummoxed by news that the company’s contract had been suspended.

“Nothing has been communicated to us. It is baffling. As far as we know it is business as usual.”

He said Willjarro was a legitimate company that had seen an opportunity in the abalone processing market. In doing so, it appeared to have “stepped on the snake’s head” by undercutting rivals.

“Our main objective is to fetch the best price for the government,” Ramazan said.

His company had no choice but to continue trading in the absence of any government instruction.

“We have running costs and overheads on a daily basis,” he said.

Ramazan said many of the allegations levelled against his company were unfounded. He declined to comment further while the matter was before court.

Other industry sources also slammed the new contract, claiming it amounted to “state capture”. Several branded it a “very suspicious” attempt to enrich a few individuals by circumventing the normal auction process.

Overberg Commercial Abalone Divers director Lea Erwee claimed she had been duped into allowing Willjarro to access her Gansbaai processing facility.

“These people must be put in jail,” she said. “We can’t get in the factory — they are occupying it. I had to take my abalone to Walker Bay [Canners] this year because they are occupying the factory.”

She said it appeared someone in government had manufactured a bogus emergency to justify the Willjarro contract.

However, Zokwana said the emergency was genuine due to the size of the state’s stockpile and the fact that the normal processing contract had expired in mid-December.

The stockpile constituted a security risk; a year ago it was stolen out of a government cold storage warehouse, he said.

My initial reaction [to the contract] was one of amazement and disbelief