Min­is­ter puts ‘emer­gency’ R60m abalone deal on ice

Sunday Times - - NEWS - BOBBY JOR­DAN

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

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