Treasury bans Beitbridge fence contractors from doing business with govt for 10 years

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News 24

Contractors who scored R21 million before doing any work on the poorly-built Beitbridge border fence have been slapped with a notice banning them from doing business with the government for the next 10 years.

Magwa Construction and Profteam CC are appealing the sanction borne out of calls for the firms to be restricted following the fence they built on the border between South Africa and Zimbabwe.

At a briefing on Tuesday, the Department of Public Works and Infrastructure's acting director-general, Imtiaz Fazel, told the Standing Committee on Public Account (Scopa) the process started in 2020 as was bearing fruit.

Fazel said:
It can now be reported that both the companies were placed under restriction by National Treasury in September 2021 for a period of 10 years. They have appealed, and the department is addressing this appeal through our legal services.

He added the matter was served before the restriction committee and authority (RCCA) on 28 August 2020.

"The department was compelled to delay the release of this information and to reconstitute the composition of the RCAA, recognising that the chairperson of the RCAA was one of the officials cited in the investigation report and subject to disciplinary action.

"This was also delayed to allow the department to initiate and advance disciplinary processes before releasing the investigation report to third parties to protect the confidentiality of the information contained in the report," Fazel said.

In its response to the department, Profteam CC denied the allegations levelled against it.

The company contended it had not committed any fraudulent misrepresentation but the advance payment was sought based on the request of senior department officials.

In February (2021), the department approved the final charges against the officials and formally reconstituted the RCAA, excluding any person who may have a conflict of interest.

"On 12 February 2021, the matter was tabled again with the RCAA and all the relevant reports and supporting evidence were provided to the committee to enable it to conclude its work.

"The committee has considered and studied the relevant investigation reports and, on 17 March 2021, issued letters to the contractor and consultant requesting reasons why the department should not recommend to National Treasury their restriction from doing business with the state," Fazel said.

On 4 May, the RCAA resolved both companies be recommended for restriction to Treasury.

"Due process has been followed, and the referral to National Treasury was submitted on 7 May 2021. National Treasury wrote back requesting several documents from the department, and the information was provided by the chairperson of RCAA in July [2021]," he added.

Following President Cyril Ramaphosa's announcement of the Covid-19 outbreak in the country, Public Works and Infrastructure Minister Patricia de Lille issued a directive for the emergency safeguarding of South African border posts in March.

The directive was issued to have emergency procurement procedures undertaken for the erection and repair of the border fences, particularly the Beitbridge border post.

Fazel said Profteam CC failed to act in the interests of the department and accordingly breached its fiduciary duties towards it.

"This is evident in their initiating and certifying a progress payment when no progress was achieved on the project, and overseeing the development of an overstated bill of quantities that placed the department at risk of financial abuse and exploitation," he added.

The department also submitted the complaint to the Engineering Council of South Africa (ECSA) to investigate the directors of both companies.

The ECSA would provide feedback once the investigating committee had made a determination on the matter, Fazel said.

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