Public Protector Thuli Madonsela said on Wednesday that tenders awarded to On-Point Engineering by the Limpopo transport department were unlawful, improper and constituted maladministration.
She found On-Point and former ANC Youth League leader Julius Malema benefited improperly from the contract.
Madonsela found the department did not follow proper guidelines in awarding the tender.
After perusing documents relating to its procurement, interviewing officials, and consulting the National Treasury, Madonsela said she found the awarding of the tender was unlawful. Relevant laws and records were also analysed.
The bid presented by On-Point in respect of the project management unit (PMU) tender deliberately and fraudulently misrepresented the profile, composition, experience and therefore the functionality of the company.
It was claimed that On-Point, which Malema’s business partner Lesiba Gwangwa is chief executive, was an established and experienced operation with management teams and professional staff that complied with the requirements of the request for proposal.
However at the time of the bid, the company existed for only a month, and had no employees, or several of the purported key management and staff.
“It is mind-boggling that the stark differences between the bid document and the tax clearance certificate did not disqualify On-Point or present a red flag regarding the possibility of tender fraud,” she said.
She received three complaints in July 2011 and decided to investigate the allegations that the department of roads and transport awarded the On-Point tender corruptly.
Also under scrutiny were claims that Malema used his political position to influence the awarding of tenders by the department and the Limpopo government in general.
Another thing investigated by Madonsela was whether Malema’s Ratanang Family Trust and/or Malema benefited improperly from the tender awarded to On-Point.
Madonsela said “The conduct of the head of the Limpopo roads and transport department, Ntau Letebele, in respect of the awarding of the bid to On-Point, was improper and constituted maladministration.”
The conduct of On-Point as PMU of the department to enter into agreements with Mpotseng Infrastructure, Baitseanape Consulting Engineers and HL Matlala and Associates respectively constituted corrupt practices as envisaged under section 12 of the Prevention and Combating of Corrupt Activities Act, 2004.
On-Point entered into “back-to-back” agreements in terms of which it received, or was supposed to receive, payments from contractors for designs which it had drawn for projects it was contracted to manage and supervise.
“The shareholders of On-Point, including the Ratanang Family Trust, benefited improperly from the tender that was awarded to On-Point.”
Madonsela ordered Letebele to take steps to cancel the PMU tender.
She said the State Attorney should institute legal proceedings against On-Point and shareholders who benefited from the PMU tender to recover money to which the department was entitled.
Sapa / Edited by Yusuf Alli