R28 million irregular SAPS tender nullified 17 years later

About 17 years ago, the government awarded a tender to Plebian Properties for the accommodation of the SAPS Family Violence and Child Protection Unit in Pietermaritzburg. The tender has been renewed several times over the years, but it has now been set aside after it was found to be riddled with irregularities.

This rendered the procurement process unfair and not equitable against other bidders, the Special Tribunal, chaired by Judge Lebogang Modiba found. The tribunal also found that the procurement process was not economic nor cost effective. The Special Investigative Unit (SIU), which applied to have the tender overturned, told the tribunal that the state had lost R28 million over the years as a result of this tender.

The SIU also asked that Plebian Properties repay the government the R28 million which it had overcharged. But Judge Modiba ruled that the claim for payment had lapsed in terms of the law (after three years), and that he could not order the money to be repaid. He, however, commented that given the peculiar challenges the SIU will face in its attempts to recover money lost during the era of endemic procurement irregularities and corruption, and he drain it puts on the economy, the legislature ought to consider extending the prescription period in these matters.

The tribunal has a statutory mandate to recover public funds siphoned from the fiscus through corruption and fraud. The SIU turned to the tribunal after a mandate from then president Jacob Zuma in 2014 to investigate irregularities and maladministration in the government, and to recover money the state may have lost as a result. Judge Modiba said this matter highlighted some of the difficulties the SIU may encounter to recover monies the state had lost due to procurement irregularities and maladministration over a long period of time.

“There are just too many cases to investigate, with limited resources. The SIU’s efforts may be futile unless legislative changes are introduced to remove the legal inhibitions it is likely to face.” The SIU has been investigating more than 2 300 lease agreements since its mandate to do so in 2014. The judge said it was thus not surprising that it took years after the proclamation was issued to bring the present application. Plebian Properties had entered into a lease agreement with Public Works and the agreement was renewed four times.

To date the police are still in the building. The SIU alleged that when it bid for the tender, Plebian Properties, via its representative Pragasen Nadesen Pillay, misrepresented to Public Works that it had complied with the bid requirements, thereby inducing the contract by fraud. This, the SIU said, resulted in the levying of excessive rental by Plebian Properties.

The SIU also alleged that Public Works officials maladministered the procurement that resulted in the lease agreements. It had emerged the building hardly had any parking space, the property was not zoned for office accommodation, and did not comply with National Building Regulations or municipal by-laws. Overturning the tender, the judge said: “It concerns me that the SAPS continues to occupy the leased premises pursuant to an irregular and unlawful procurement process.”

So as to not disrupt SAPS services, he suspended his declaration that the lease agreement was invalid, pending finalisation of the matter before the tribunal.