Court orders Beitbridge fence builders to pay back profits

The Special Investigating Unit (SIU) has welcomed the dismissal by the high court in Johannesburg of an appeal by two companies that were appointed by the public works & infrastructure department to build a Beitbridge border fence in 2020. 

Profteam and Caledon River Properties were appealing against an order made by the Special Tribunal in March 2022 to strip them of the multimillion-rand profits earned from the construction of a border fence.

In terms of its contract with the department, Profteam would construct a 40km mesh fence along the SA-Zimbabwe border at Beitbridge to secure the border during Covid-19 pandemic. 

Caledon River was contracted to provide professional services related to the project. 

Soon after the fence was constructed, it started to fall apart, prompting the SIU to investigate the contracts. The SIU found various irregularities in the awarding of the contracts and approached the tribunal to declare the contracts invalid.

Public works and infrastructure minister Patricia de Lille has called the project “a total disaster”. 

The contracts were set aside by agreement between the parties, and the Tribunal declared the agreement an order of the court in July 2021. 

The Tribunal then had to formulate a just and equitable remedy after the invalidation of the contracts. 

While the SIU sought the repayment of the amounts already paid to the companies, or an order divesting the companies of the profits they derived from the contracts, the companies wanted the Tribunal to order that the department pay the remaining balances due to them.

In a judgment on Tuesday, the high court ordered that Profteam and Caledon must, within 30 days, file audited statements and debatement of accounts reflecting their respective income and expenditure in the contracts. 

The court ordered the SIU and the department to appoint, within 30 days thereafter, qualified experts to compile a report as to the reasonableness of the service providers’ expenses. 

The court ordered the two companies to pay the department, within 30 days, all profits earned from the contracts as agreed by the experts. 

“The SIU welcomes the order of the high court, as it enforces the implementation of the unit’s investigation outcomes and consequence management,” the SIU said in a statement. 

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