The Democratic Alliance (DA) welcomes the decision on Friday of the Gauteng South High Court in the civil case involving ValorIT, the small time supplier that won a tender to the value of R152,7 million with the Companies and Intellectual Property Registration Office. The tender was awarded despite a much lower tender of R63million from JSE listed Faritec Ltd.
The court ordered ValorIT to immediately pay R3million to Mantra Consulting (Pty) Ltd and to give reason why they should not pay the balance of approximately R7million. The funds in question are the more than R10million in consulting work relating to the ValorIT contract that was done by Mantra.
Mr. Abe Mbulawa of Mantra Consulting had an agreement with ValorIT whereby he would assist with the preparation and implementation of the ECM tender. ValorIT however, reneged on their payments under the agreement, forcing Mantra Consulting to approach the court for a ruling.
The court found the agreement to be legally binding.
It also speaks volumes that Cipro, in terms of their ECM Agreement with Valor IT, had the authority to enforce Valor to honour this subcontractor agreement but chose not to do so.
Mantra Consulting requested the Minister and Department of Trade and Industry in August 2009 to assist in obtaining payment from ValorIT. According to Abe Mbulawa of Mantra Consulting, neither the minister, nor the Department responded to this request.
The letter was however passed on to ValorIT, who then tried to use it against Mantra Consulting.
The positive developments from the South Gauteng High Court are matched by encouraging movements from the Minister of Trade and Industry. Dr. Rob Davies, who declared back in November 2009 that the ECM tender had been given "a clean bill of health", now appears to have the support of cabinet to act against the officials implicated of wrongdoing. A statement released following the cabinet meeting on 5 May reads:
"The Minister of Trade and Industry briefed Cabinet about the forensic investigation into the affairs at Companies and Intellectual Property Registration Office (CIPRO) following a report from the Auditor-General (AG). The forensic report found some irregularities in the procurement of services. Cabinet noted the report and supported the Minister's plan to take action against all those who are implicated in the AG and forensic reports."
While we find it strange that a minister needs to lobby his colleagues to act against people implicated in "irregularities", we still welcome the support of cabinet on this issue. The media statement issued after the cabinet meeting was also the first public indication that the forensic audit was able to supply answers to some of the questions that the Auditor-General raised in his report - questions such as whether ValorIT benefitted unfairly from confidential information that was given to it by senior officials in Cipro.
Although the minister is to be commended on his intentions, some tough action is now needed. The DA hopes that other ministers will pay the same attention to the Auditor-General's report. Some of the irregularities identified by the Auditor-General involve staff from other state institutions, such as Sita.
The Democratic Alliance will soon be putting questions in this regard to the Minister of the Department of Public Service and Administration.
Statement issued by Andricus van der Westhuizen, MP, Democratic Alliance deputy shadow minister of trade and industry, May 9 2010
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