IRREGULAR NYANDA CONTRACT CANCELLED BY GAUTENG ROADS DEPT

The Gauteng Roads and Transport Department has cancelled its security contract with Abalozi Security (formerly GNS Risk Advisory Services) after a legal review found that prescribed procurement processes were not followed and that other companies could do the same service at a much lower rate.

This is revealed in a reply by Roads and Transport MEC Bheki Nkosi to my questions in the Gauteng Legislature.

According to Nkosi, the contract was cancelled on 16 March 2010 and the total expenditure amounted to R71 million.

The controversy over this contract arises from the fact that it was awarded without going to tender in October 2007 to a company that was part-owned by General Siphiwe Nyanda, who is now Communications Minister and whose family still benefits from a trust that holds a 45% share in it.

Incredibly, according to Nkosi "the value of the contract ... was not determined in advance and fixed for the period in which the services were rendered". Furthermore, "the Department has not instituted disciplinary actions or corrective action against the person who did not follow the procurement process in appointing GNS."

It is truly outrageous that no one is held accountable for this gross lapse of procedure that has meant many millions extra spent for a contract that could have been done far more cheaply.

I notice that this contract was only cancelled at about the time I first raised it as an issue in the Legislature. It would probably have carried on if it were not for the public fuss because of the association with Nyanda.

It is really suspicious that both this contract and the Transnet contract awarded to GNS were irregular. It looks like cronyism at the public expense.

I have referred this matter to both the Auditor General and the Public Protector who will hopefully dig deeper as to why this happened.

Meanwhile, I challenge MEC Nkosi to do what the SAA Board has done in the case of former CEO Khaya Ngqula - he should take legal steps to recover the wasted money from the former head of this department Mr Sibusiso Buthelezi, who was the Accounting Officer who should have prevented this from happening.

Statement by Jack Bloom, MPL, DA Gauteng Corruption Spokesman, August 4 2010

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