Treasury works to reduce ‘plundemic’ opportunities

Parliament hears plans for combating Covid-19 procurement corruption.
Tito Mboweni has had enough of ‘the thieves’ and wants to know who the losing bids came from and why they were turned down. Image: Waldo Swiegers, Bloomberg

Covidpreneurs looking to enrich themselves off funds set aside for personal protective equipment (PPE) for frontline health workers will have a harder time circumventing the state’s procurement processes: National Treasury has suspended emergency procurement and is set to introduce increased transparency. 

Read:
Ramaphosa’s ousted spokeswoman regrets PPE contract
Liberation activists call for the ‘bleeding’ of Covid-19 funds to stop

Claims of corruption ranging from excessive pricing to the illegal procurement of supplies related to Covid-19 contracts have come into sharp focus, pushing President Cyril Ramaphosa to rope in the Special Investigating Unit (SIU) to investigate irregularities in the use of Covid-19 funds. 

Ramaphosa has also established a multidisciplinary centre comprised of law enforcement and intelligence agencies to investigate cases around the procurement and distribution of food parcels, social relief grants and other funds set aside for the fight against Covid-19.

A number of cases are already under investigation. 

An unethical society

On Wednesday Finance Minister Tito Mboweni and Director-General Dondo Mogajane informed Parliament’s finance committees on the measures they are putting in place to prevent the theft of Covid-19 resources. 

No sooner had we begun to make allocations for Covid-19 had the thieves begun to assemble at the door to plan to steal,” said Mboweni, reflecting on a “prophetic” statement he made in Parliament after a debate on the supplementary budget necessitated by the pandemic. 

Read: Treasury seeks to tighten PPE procurement

In the early days [of Covid-19 in SA], Treasury issued a number of instructions related to emergency procurement processes since the government declared a state of emergency in March.

Instructions that would regulate the items to be procured as well as price, criteria for qualifying companies and quantities were put in place to remove any barriers in acquiring PPE as rapidly as it was needed in a fast-changing market environment. 

“In an ethical society, one would have expected that all the parties concerned would have followed the Treasury instruction to the letter and ensure that all that is being procured is in line with the instruction,” said Mboweni. 

Transparency 

“The fact is and reality is people found the opportunity to do that which is wrong.” 

Mboweni will be meeting with all finance MECs (members of executive councils) on Thursday to investigate whether all the processes outlined by Treasury were followed.

To date, provinces have spent a total of R6.8 billion towards the Covid-19 response. 

Source: National Treasury

He said Treasury will also inform the finance MECs that they should publish all the contracts and details about the tendering companies, particularly in terms of how long they have been operating. If any politically exposed persons were awarded contracts, the process that was followed should also be declared.

Mboweni also wants details of the competitors who were bidding for the contracts and the reasons they were not successful to be made public. 

“It would appear that there is a prima facie case that not in all instances was the Treasury instruction followed,” said Mboweni. 

“There are those things that the National Treasury and the accounting officer and the procurement officers can do and there are those of a criminal nature which must be followed by the law enforcement agencies.” 

Emergency period in perspective 

In the immediate term, Mogajane said all emergency procurement of PPE and other protective clothing should cease, as the issues of “demand and supply” that government had to deal with in the early months of its response to the pandemic had ceased. 

As a result, we can all go back to measures we all know,” said Mogajane. 

“You can now be part of a procurement list [and] the price will continue to be determined and dictated by us because we think we are at a better place to understand what the price is at any given time.” 

Institutions will have to seek permission to procure above the absolute price set by Treasury, and state workers can still not do business with government. 

Beyond that Treasury wants to modernise state public procurement to make the supply of goods and services easier, and to increase oversight. 

“If the private sector can do it, why can’t we? We cannot rely on old archaic systems that do not help us,” said Mogajane. 

He said Treasury will look for assistance from the private sector to develop an integrated project management service for the procurement value chain. 

Mogajane says that automating and modernising the government procurement system will solve the challenges government has been dealing with, including delayed payments to suppliers.

AUTHOR PROFILE

COMMENTS   28

Sort by:
  • Oldest first
  • Newest first
  • Top voted

You must be signed in to comment.

SIGN IN SIGN UP

The South African government must abolish the tender system in its entirety. The tender system has evolved into a black market whereby the intended recipients of aid/funds are exploited and robbed.

The government has to bow down to the powers of economics. Black markets can only exist when there is excess demand in a market. Tenderpreneurs keep creating this excess demand by constant thievery so that perpetual and even greater demand of aid is in play of which the government cannot fully supply.

Recommendation:
There must exist public-private partnerships(PPPs) so that certain government functions can be carried out by the private sector for a fee, underpinned to a pre-set performance criteria. Both the public and private parties assume the necessary risks involved. It has to be a partnership until the completion of the function. This will enhance accountability and oversight.
Not this tender system where a two month old company is awarded R250million and each party goes their own way and then the government cries foul when the money dissipates into thin air. NO!

The only way to stop the theft and corruption is to hold back all funds, so that there is nothing to steal. In the meantime work on legislation that thieves get put against a wall and executed within max. 7 days of their theft being noticed. The cANCer needs to be cut out.

Promises… promises

Talk, talk, talk – the ANC loves to talk ad infinitum. Where’s the action, ANC? Some top leaders in jail? Or is that too close to the bone for guys like Ace, Supra, Edward and the rest. So sick of this criminal crowd.

No amount of new measures will stop this. All ANC cadres simply believe “now is our time to eat” and it is like a tsunami wave- unstoppable.

Thievery and patronage funds the ruling party. Why would they prevent it?

Why did this happen in the first place?

They knew full well that money would be stolen. CR even warned about it right in the beginning.

So if you knew this would happen and you did nothing about it maybe you are guilty of facilitating the theft?????

Cant trust any of them.

Kleptocrats getting worried, just a little.

What are the consequences for the Finance MEC and their senior executives? Will these officials be prosecuted?
The PFMA regulates financial management at national and provincial levels and must be adhered to. The flagrant disregard of the rules governing public tender procedures in government contracting is astounding.
The Consitution provides that procurement it must comply with five principles: fairness, equity, transparency, competitiveness and cost-effectiveness. To this the ANC added BEE which is where it all goes wrong of course.

The tender system, if handled correctly, works excellently to get the best possible product at the best price. I have worked with tenders for more than 30 years and had no problems with corruption or theft, because i knew that the thing that can sink a tender, is the specification. With proper specifications and bills of quantity, there is very little that can go wrong. Good specifications bind the adjudicators to award the best tender. Without competetive bidding, it will actually be much easier for corrupt officials to award all projects to pals.

Presumably you do not tender in ANC South Africa. An engineer friend who runs a very successful non BBEEE company says he doesn’t waste time and money on tenders any more. He simply waits to be approached by the BBEEE company who got the tender, but has no knowledge nor capacity to do the job. They invariably offer him more than he would have tendered. That is the cost of racist laws.

I love this comment.

No Griet, I worked for a South African municipality under ANC rule. We were fortunate to have a strong bid specification committee and as I said, with a solid bid specification, there is really very little space for chancers. And all ANC people are not corrupt. With strong leadership from the mayor and top management, our council did not interfere with tenders. I do not vote for the ANC, but I must give credit where it is due.

My brother in law has 100% exactly the same experience as your friend. The last project they did near Giyani was awarded to a connected Polokwane cadre who was not even an engineer.

It all boils down to ethical behaviour I’m afraid. And when those in leadership positions have questionable values, things will go wrong. I often wonder if those in government leadership don’t reason that poor ethics are normal when you are in power and that it is prescribed values a leader should have – even if questionable. Maybe they reason that everyone will behave like this if given the chance, so they reason that it’s justifiable. Why else will you steal and steal until you are blue in the face.

Well, Auretha, then that unnamed municipality must be the one swallow that unfortunately does not a summer make.

I am afraid very most people who read the daily news and have insight into AG’s reports will be having a good laugh at your comments. Care to name this unusal municipality?

I did not think there would be a reply.
Probably a bot doing it’s spin.

No Joe, no spinning, just facts. I do not work there anymore, as I have retired. The people working thre are still my friends. As your last comment proves, I can not identify them to an abusive person.

I rest my case.

I’m shocked I tell you, I’m shocked…

why not name them unethical people directly…you better act up big boy or the IMF will ask their money back!

These are all leaders of an organisation that believes there is nothing wrong with turning your own children into thieves.

The noise they make is just bluff.

I wonder how much of the R6 billion has been allocated for the normal feeding frenzy when state, provincial or municipal is allocated…
The pandemic hit suddenly and their was not enough time to do normal tender process…i believe contracts were awarded to the 1st person that said they can supply…you just know their was some “gekonkry” and some gor rich very quickly…
Why dont the AG do a lifesty audit when they do a department or provincial or municipal audit…pick any 10 people and do an audit
..pick those that has a say in the food chain…
John Steenberg said”there is not a trick out there on how to steal money that the ANC hava not applied and the existing methods they have perfected… Corruption became lauch a pandemic in SA that you know PPE is going to be stolen..in the past the tender would require for 10 ventilators…and none would arrive…now the ask for 10 and 9 arrive…only 1 out of 10 stolen not all 10…that is a big improvement and still leaves something for the next guy to steal…THAT is how wealth os spread over a very broad base of citizens and a big middle class is build rather than the same 100people stealing everything and you end with big base of poor and small niddle class and small elite class that we currently have…nobody will mind if you steal…whoever (1) awards and (2) receive the tender will both reap some benefits….just keep it in control and spread it over time..not all at once…give the other BEE companies a chance to steal as well

How about just asking the IMF to send a team to review all tenders and government expenditure?

Would save time, money, effort, reinvention of the ethics wheel and bust out about 80% of the entire government department.

But thats only if ANC were really serious about solving the looting problem.

It must be tough running SA Inc when you cannot trust your employees.

The only thing the Treasury is doing is managing public opinion and trying to temper growing outrage and outright rage at this farce.

Be careful – this is the right hand drawing your attention, just like the Zondo commission – all the while the left hand keeps plundering.

The operative word here is “works” in the heading , that tells the whole story! The ANC do not work, don’t know how to work, and don’t care to work! When you get a position in the ANC, you don’t even want to know your package, that is not the drawcard at all, it’s only signing on money or appearance money!!

When one cannot bring anything of value to the table, they have to steal the table to walk away with something!

End of comments.

LATEST CURRENCIES  

USD / ZAR
GBP / ZAR
EUR / ZAR

Podcasts

NEWSLETTERS WEB APP SHOP PORTFOLIO TOOL TRENDING CPD HUB

Follow us:

Search Articles:Advanced Search
Click a Company: