Special Tribunal sets aside multimillion-rand security contracts

The Special Tribunal has reviewed and set aside contracts worth more than R490m awarded by the department of correctional services and the Independent Development Trust (IDT) for prison fences and other security work.

The two contracts were entered into in 2011 and 2012 by the IDT and other service providers after the IDT had been appointed as an implementing agent by the department. They are being investigated by the Special Investigating Unit (SIU).

The IDT would charge a 4% management fee as per the memorandum of agreement concluded with the department on October 10 2011, and was tasked to work with an available programme budget of R492.9m for the 2011/2012 financial year.

The SIU has successfully argued in the tribunal that the contractual arrangement between the department and IDT was unlawful because an organ of state could not exercise any power unless expressly provided for in law.

There is no statutory provision that empowers the department to appoint an implementing agent for its projects, the SIU argued.

The SIU also argued the transfer of funds to the IDT by the department before any work was undertaken could constitute prepayment, which is proscribed under National Treasury regulations.

On Monday, tribunal judge Lebogang Modiba reviewed and set aside the contracts concluded between the IDT and three other service providers.

She also reviewed and set aside the IDT’s decision to appoint Manyeleti Consulting SA as an adviser for one of the tenders and related contracts with other service providers.

Modiba ruled the service providers should account for all the money paid to them in respect of the tenders.

“The third to seventh respondents shall render the full accounts of all the payments they received under [two tenders] and reasonable expenses incurred under these tenders, supported by necessary vouchers [accounts],” she said in her ruling.

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