R8bn and counting: That’s the cost of Covid-related corruption, says updated SIU report
The Presidency has released the ‘Third Final Report’ by the Special Investigating Unit of its investigations into Covid-related corruption which President Ramaphosa received on 15 December 2022. The report provides new information on investigations conducted between 1 July and 31 October 2022.
The scale of the Special Investigating Unit’s (SIU) investigations is evident from the fact that they report probing 5,513 contracts given to 3,058 service providers. Thus far, irregularities have been identified in 2,965 contracts – to the tune of R8.8bn.
The 277-page report is available on the Presidency’s website.
The SIU summarises its findings in the tables below:
Much of the latest report is a recap, in table form, of investigations, outcomes and recommendations that have been covered in its eight earlier reports under Proclamation R23.
Read more in Daily Maverick: Latest SIU report reveals billions more rands of unlawful and dodgy Covid-19 spending exposed
However, what is becoming clearer is that the effectiveness of the SIU’s investigation will ultimately depend on the willingness and capacity of political and criminal authorities to vigorously pursue its recommendations. For example, as the SIU table below illustrates:
- 456 referrals for disciplinary action have been made to government departments… but thus far very few have been acted on.
- 476 referrals have been made to “the relevant prosecuting authority” – it is unknown how many of these are being pursued.
In addition, the report begs questions about the capacity of the Special Tribunal, the legal body with the power to nullify irregular and illegal contracts. Although the Special Tribunal has played a pioneering role since it was established, its work has often been hampered by legal challenges to its authority, now empowered by an important decision in its favour by the Constitutional Court in the Ledla matter.
Sources contacted by Daily Maverick worry about the fact that the Special Tribunal has only one full-time judge – Judge Lebogang Modiba. Of the five other judges assigned to it, only two are believed to be active on the Tribunal.
Yet there are now 59 matters requiring its attention under this proclamation alone.
The result of this should be of concern to the public in South Africa. It poses a real danger that officials found to have been involved in corrupt activities may never face legal or even disciplinary action, and that monies may never be recovered.
Thus, although irregularities to the value of R8.8-billion have so far been found by the SIU under Proclamation R23, the value of matters enrolled at the Tribunal is less than R2.5-billion and the rand value of cash and/or assets actually recovered so far is a mere R36-million.
This is a vast disjuncture, amounting to less than half a percent. Clearly, there is a lot of work to be done.
Specific findings by the SIU
Daily Maverick is carefully studying the latest report. However, some of the latest findings on the matters that have been finalised confirm suspicions raised from investigations we conducted in 2020.
In particular, we were the first to raise the alarm about the construction of four new field ICU hospitals built using alternative building technology (ABT). In particular, we questioned their cost, the process by which contractors were appointed and delays in their construction which meant they were still unfinished for the first two major waves of Covid.
Read more in Daily Maverick: Gauteng ICU field hospitals: Suspensions, shenanigans and unanswered questions
Read more in Daily Maverick: Gauteng’s ‘new’ R1.2bn Covid-19 ICU hospitals still lie abandoned, unfinished or underused
In response to an investigation initiated after a complaint by former Gauteng Premier David Makhura, the SIU has found that the Principal Submitting Person – the architect who is responsible for overseeing the entire project – was not lawfully appointed, noting that: “no proper selection process was followed in terms of section 217 of the Constitution in that only one service provider was approached by the Gauteng Department of Infrastructure Development on behalf of GDOH.”
However, after investigation of each of the ABT contracts, the SIU found that three of the four were properly fulfilled within timeframes and adjusted budgets and that the hospitals were built.
Concerning Kopanong Hospital, however, they found “fruitless and wasteful expenditure” totalling more than R44-million “as the building is incomplete and abandoned. The buildings were never occupied or used for the intended purpose”.
The SIU’s report notes that there is an ongoing civil action between Condocor (Pty) Ltd, the building contractor, and the Gauteng health department, and on this basis say that they will await the outcome “to determine possible future action” to recover the monies.
They also recommend that “disciplinary steps be instituted against the then Acting HOD: Gauteng DID (Mr R Makhumisani) and the then SCM Manager of Gauteng DID in respect of the contract for the construction of Kopanong Hospital”.
These latest findings mean that, taking into account the nearly R500-million wasted expenditure on upgrading the Ashanti Gold hospital in Carletonville, more than R750-million has been blown by the Gauteng health department on new or refurbished hospitals that were never to be.
Read more in Daily Maverick: R700m abandoned Carletonville hospital vandalised – Germiston City News
And yet, no heads have rolled.
Red Roses Africa/Mainstreet 699 (Pty) Ltd
In addition, the latest SIU report updates its earlier findings on a matter previously reported on extensively by Daily Maverick:
Read more in Daily Maverick: Now for the big fish: Competition Tribunal finds hand sanitiser supplier to SAPS guilty of excessive pricing
Once more, it states that a contract worth R596-million with Mainstreet Africa 699 (Pty) Ltd, for the supply of PPE to the SA Police Service (SAPS) “was unlawful” because it was an “unsolicited proposal” by a company that is not a sole supplier of medical products and because procurement processes had not been followed.
However, the SIU report itself is unusual because it departs from its regular format and contains no recommendations for future action, “noting” only that “Mr B Qwabe the Director of Mainstreet (Pty) Ltd was offered a platform by the SIU to give his account of what transpired with the SAPS PPE contract but he opted not to use the opportunity”.
Daily Maverick believes that this means this investigation, involving the most expensive PPE contract of the entire pandemic, is one of the 9.8% of matters that the SIU reports have still not completed and are therefore ongoing.
To be continued…DM/MC