NEWS & ANALYSIS

Evidence: First phase of nuclear deal is corrupt – Gordon MacKay

DA says AG found that the procurement process to date is irregular and unauthorised

DA reveals evidence that the first phase of nuclear deal is corrupt

22 August 2017

The DA can today confirm that the first phase in the nuclear deal has been found to be corrupt by the Auditor-General (AG). The DA is in possession of extracts of the AG’s forthcoming report for the financial year ending March 31 2017.

The AG’s findings are unequivocal - the nuclear procurement process to date is irregular and unauthorised. The report makes the following findings:

- The procurement of the Nuclear Procurement Management System (NPMS) – awarded to Central Lake Trading t/a Empire Technology and owned by close Zuma ally, Vivian Reddy, was irregular. The original amount of the contract was also inflated from R60 million to R171 million by the Department of Energy (DoE).

- The procurement of Nuclear Transaction Advisory Services, awarded to Mahlako A Phahla, was unauthorised as there was vast deviation from the original specifications from 11 work requirements in the original contract to four work requirements – all unrelated to the original, in the subsequent contract issued by the DoE. This deviation meant that the DoE was, in fact, embarking on a new contract which would, in turn, need to be subjected to a new and separate competitive tender process.

- The AG’s report further seems to confirm last week’s media reports which indicate that Mahlako A Phahla obtained a contract extension without the necessary approval from the DoE’s own bid tender committee or National Treasury, as required by law.

The DA can confirm that AG’s report has served before to the DoEs Audit Committee. However, the DA is reliably informed that the Director General, Thabane Zulu, has refused to sign off.

This may be due to the allegations, as indicated in media reports last week, that Mr Zulu may have played a direct role in both irregular contracts.

The fact is that South Africans cannot afford nor do we need the nuclear build programme and now it appears that the first phase has been corrupted. The DA is currently exploring all avenues on this matter and with a view to legal action should it be warranted.

Issued by Gordon Mackay, DA Shadow Minister of Energy, 22 August 2017