GAUTENG PREMIER WON'T, SO DA LAYS CHARGES OVER NYANDA CONTRACT

I have today laid a charge of financial misconduct against Mr Sibusiso Buthelezi, the former head of the Gauteng Roads and Transport Department, for his apparent gross negligence in the award of a contract without tender to GNS Risk Advisory Services, a company that was 45% owned by General Siphiwe Nyanda.

The charge was laid at the Commercial Crimes Unit in Johannesburg (see the full affidavit below).

According to an official reply by Gauteng Roads and Transport MEC Bheki Nkosi to my questions in the Gauteng Legislature earlier this year: "The irregularity in the award of this tender relates to the fact that no procurement procedures other than the deviation route were followed in terms of advertisements, evaluation and approval of service provider."

It is now clear from information that I received from another official reply from Nkosi last week that this contract was a huge rip-off as companies that replaced GNS (now renamed Abalozi Security) are doing the same job at a vastly reduced cost - about R24 million less per year.

This would not have happened if the contract went out to competitive tender.

I estimate that the department probably overpaid more than R50 million out of the R71 million paid to Abalozi before its contract was cancelled in March this year after it was awarded in October 2007.

Buthelezi is charged under Section 81 of the Public Finance Management Act (PFMA) that says that an accounting officer of a department commits financial misconduct if he willfully or negligently "makes or permits an irregular expenditure or a fruitless and wasteful expenditure".

He faces a possible criminal sentence in terms of Section 86 of the PFMA if his non-compliance is found to be willful or grossly negligent. This offence can lead to a fine or imprisonment not exceeding five years.

If Buthelezi is convicted he could then be liable to pay back the wasted money.

It is an utter disgrace that Gauteng Premier Nomvula Mokonyane has ruled out any action against Buthelezi in this matter, who was also let off the hook after a settlement was reached with him following the damning findings of the Resolve Group report into allegations made by former MEC Ignatius Jacobs.

I suspect that Buthelezi is not being pursued in this matter by Mokonyane because he is part of ANC Gauteng Chairperson Paul Mashatile's "Alex Mafia" and the Nyanda link probably makes it politically risky as well.

I have laid this charge as there must be accountability for the huge waste of public money by the award of this security contract without tender.

It is no use having a wonderful piece of legislation like the PFMA if it is not enforced at all times.

STATEMENT

I, the undersigned,

Jack Brian Bloom

do hereby make oath and state the following:-

1) I am an adult male of full legal capacity with identity number 610102 5048 083. I am an elected member of the Gauteng Provincial for the Democratic Alliance (DA) and its designated spokesman on corruption in this province telephone 011 498 5979, 082 333 4222.

2) The facts herein contained are, as save where otherwise stated or as appears from the context, within my own personal knowledge and belief, true and correct.

3) I am well aware that the content of this statement is not to set the solitary basis for the purposes of prosecution nor does this statement contain irrefutable evidence of fact for the purposes of prosecution, but is designed to assist law enforcement agencies to investigate information that has now become public knowledge.

4) According to an official reply in the Gauteng Provincial Legislature by Mr Bheki Nkosi, then Gauteng MEC for Roads and Transport, "a contract relating to services of risk management, advisory services and security services" was awarded to GNS Risk Advisory Services on 25 October 2007.

5) Furthermore, according to this written reply "a tender process was not followed in awarding the contract. The Accounting Officer appointed GNS Risk Advisory Service through a deviation as provided for in terms of Treasury Regulations 16A6.4" and ""The value of the contract in respect of the Department and its entities in general was not in all instances of services required from GNS determined in advance and fixed for the period in which the services were rendered .... The irregularity in the award of this tender relates to the fact that no procurement procedures other than the deviation route were followed in terms of advertisements, evaluation and approval of service provider." (see attached reply 4.TR001).

6) According to this reply, the said contract was reviewed and cancelled on 16 March 2010 and it was discovered that there were other companies who could do the same service at a much lower rate.

7) The extent to which replacement companies were cheaper is revealed in another official reply in the Gauteng Legislature by Nkosi (see attached reply 5.TR081). For instance, instead of paying R848 160 per month to Abalozi to guard g-Fleet at Bedfordview, Pothlako Security and Cleaning Services is doing the job for R184 643 a month. A further R747 840 a month to Abalozi for "g-Fleet risk assessment, fraud prevention and forensic investigation" has now been dispensed with altogether. All in all, it is reasonable to estimate that about R2 million a month has been saved by cancelling the Abalozi contract.

8) In relation to all of the above it should be established whether in terms of Section 81 of the Public Finance Management Act any act of financial misconduct has been committed, specifically by the accounting officer and then Head of Department Mr Sibusiso Buthelezi,

9) In relation to all of the above it should be established whether in view of the large amounts of money saved by the cancellation of the contract, Mr Sibusiso Buthelezi contravened Section 86 (1) which makes it a criminal offence if non-compliance is willful or grossly negligent.

10) In relation to all of the above, whether any other person can be held accountable both criminally and financially.

11) I know and understand the contents of this statement and have no objection to taking the prescribed oath, which I consider to be binding on my conscience.

Statement by Jack Bloom MPL, DA Gauteng corruption spokesman, November 8 2010

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