Department gets out of illegal R2bn deal

A contract that was corruptly extended and ended up costing taxpayers more than R2 billion has been terminated after a four-year battle. On Wednesday, the Constitutional Court overturned a Supreme Court of Appeal ruling that allowed Tasima (Pty) Ltd to continue with the contract for the Department of Transport. Former director-general George Mahlalela had illegally extended it even though Parliament’s portfolio committee on finance had advised that the matter be put to tender as Tasima’s charges were too high and the department couldn't afford them. Tasima was awarded the contract in 2002 to run the Electronic National Traffic Information System (eNatis) for five years, at a cost of R355 million. However, shortly before it was due to end in May 2007, Tasima asked the then director-general of the department, Mpumi Mpofu, to extend it.

She refused, saying that in terms of the contract, the department would take over the operation of eNatis. Tasima was given a month-to-month contract to run the operation in order to avoid disrupting the system before a handover could be concluded. When Mpofu left, Tasima approached the new director-general Mahlalela with the same request. The department asked Tasima to hand over eNaTIS but it wouldn't do so, opting to approach the high court to enforce the purportedly extended contract. Tasima won. The department also approached the high court and won its case to terminate the contract. Tasima then approached the Supreme Court of Appeal, which overturned the ruling. The department approached the Concourt, which on Wednesday ruled that Tasima had to hand over the services and eNatis to the Road Traffic Management Corporation, which falls under the department.

Justice Chris Jafta said the extension, which ran for five years longer than the set period, had been unconstitutional and illegal, and motivated by corruption and fraud. “What makes corruption have a devastating impact on our society is the fact that, as a developing country with limited resources, we have not so long ago emerged from the dark past of apartheid, which caused enormous inequalities,” he said. "The unlawful extension continues to have a huge impact on the department’s reserves, long after Mr Mahlalela left the department. It costs the department about R50 million per month to maintain.” Justice Jafta said it had been alleged that a Mr Ncube signed a R2 million-a-month consultancy agreement with Tasima for no specific services, on condition that the initial agreement between Tasima and the department was extended for more than 18 months. Mahlalela was found to have been renting Ncube’s house at R45 000 a month. Although he couldn't afford that rent and failed to pay for a year, Ncube did not take action against him.