Africa's Public Procurement & Entrepreneurship Research Initiative – APPERI


Democratic Alliance

Absa wants to reverse social security deal


By Nicola Mawson, ITWeb deputy news editor

March 16, 2012

AllPay, a subsidiary of big four bank Absa, is set to square off with the South African Social Security Agency (SASSA) and a competitor next month, over a R10 billion contract it alleges was awarded unlawfully.

AllPay argues SASSA’s five-year deal with Net1 UEPS Technologies unit Cash Paymaster Services (CPS), awarded in January to cover SA‘s nine provinces, does not comply with the necessary regulations and laws.

AllPay claims, in an affidavit filed with the court this month, that the “process followed by SASSA in awarding the tender to CPS is very deeply flawed”. AllPay’s application to have the award set aside is set to be heard on 11 April.

Net1 previously had a contract to distribute grants in five of SA’s nine provinces. AllPay had been handling payments in the Free State, Western Cape, Gauteng and Eastern Cape, for a decade.

Payment disruptions

AllPay argues the award to CPS does not comply with the Constitution, National Treasury regulations or the Public Finance Management Act and is “unlawful”. It says the 10 million beneficiaries will be prejudiced if SASSA goes ahead with the CPS deal, while the matter is pending before the court.

Earlier this month, Democratic Alliance shadow deputy minister of social development Emmah More claimed the change in service providers disrupted grant payments, despite government assurances to the contrary. She said hundreds of recipients did not receive payouts.

AllPay alleges that CPS’s bid did not comply with SASSA’s requirements and that AllPay’s score was inexplicably lowered. “SASSA has acted in a manner which is designed to secure a particular outcome which favours CPS.”

Millions lost

The document, penned by Charmaine Webb, AllPay Consolidated’s GM of sales and service delivery, supplements a February affidavit.

Webb alleges in the February filing that AllPay will “suffer severe prejudice and irreparable harm if interim relief is not granted on an urgent basis”. She says AllPay “will need to dismantle a massive infrastructure if interim relief is not granted”.

However, if the company is successful in its bid, AllPay will need to go through the process of setting up infrastructure again, says Webb. She adds that the company’s technology, logistics and security partners stand to lose about R7 million in income a month.

If AllPay does not get the relief it seeks, 553 temporary and permanent staff will need to be retrenched, which will cost Absa R26 million, writes Webb. In addition, Absa stands to lose anywhere between 1 million and 1.75 million accounts.

No disruption

Net1 VP of investor relations Dhruv Chopra says “there have been several further affidavits that have been filed since to respond to AllPay’s allegations in a comprehensive manner”.

Chopra says, while the matter is pending, CPS continues to implement the tender based on the contract terms it has with SASSA. “We strongly believe we won the contract purely on merit and that a proper procurement process was followed.”

At the time of the award, chairman and CEO Serge Belamant said: “We are overjoyed by the SASSA tender award and very proud of the confidence that SASSA has placed in our company and technology.”

Department of Social Development spokesperson Lumka Oliphant says it is “not in a position to comment on allegations that have not been tested in court”.

Oliphant says “in the meantime, we want to assure our grant recipients that the service will not be disrupted. They will get what is due to them every month.”

South Africa may be sanctions-busting hub for Iran, warns DA

The Witness

by Rajaa Azzakan

May 15th, 2012

CAPE TOWN — The Democratic Alliance warned yesterday that South Africa may be used as a route to get parts for military helicopters in Iran.

Lindiwe Mazibuko, DA parliamentary leader, yesterday told the Cape Town Press Club this was totally against a resolution of the United Nations.

At the same time she praised Deputy President Kgalema Motlanthe for his request that the Public Prosecutor investigate bribery allegations against his life partner, Gugu Mtshali.

She said Motlanthe showed much needed political will to get corruption investigated independently.

The Sunday Times reported that Mtshali was allegedly involved in an attempt to get a bribe of R104 million in exchange for government support for a South African company to get a contract to supply Bell helicopters and parts to Iran.

Mtshali, Raisaka Masebelanga and other associates of Motlanthe reportedly met in February last year in Johannesburg with representatives of 360 Aviation to discuss the buying of government support for a contract with Iran, which would be worth some R2 billion.

The report stated that Barry Oberholzer, chief director of 360 Aviation, said Mtshali and company wanted R10 million up front as a consultancy fee as well as shares worth some R94 million.

A front company, which would have been registered by 360 Aviation, would have supplied American Bell helicopters and parts to the the National Iran Oil company.

Mazibuko warned that the larger picture — that South Africa could be used as a route to supply parts for Iran military helicopters — should not be lost sight of.

She said Motlanthe’s fast reaction was in stark contrast with the delays involving investigations into South Africa’s arms deal, which have been dragging on for years.

Mazibuko will ask President Jacob Zuma in the Assembly today if the full report by the commission of inquiry that he ordered into the weapons transactions will be made public and whether any action will follow against those involved.

Regarding Cosatu’s refusal to meet the DA, Mazibuko said the labour federation was not serious about helping to solve the issue of joblessness among South Africa’s youth.

She said it seemed the trade union was placing petty party politics ahead of SA’s interests.

S.Africa to re-open arms deal probe

By Sibongile Khumalo (AFP)

September 15, 2011

PRETORIA — South Africa will re-open the investigation into a multi-billion-dollar arms deal which involves claims of bribery in the country’s largest military contract, the president’s office said on Thursday.

Jacob Zuma has decided “to appoint a commission of inquiry to investigate allegations of wrongdoing in the Strategic Defence Procurement Packages, generally known as the ‘arms deal'”, his office said in a statement…

The arms deal is a political hornets’ nest in South Africa, where Zuma himself had faced charges of fraud, money laundering and racketeering in connection with the 1999 deal…South Africa spent about $5 billion to modernise its military, in a deal that included the purchase of 12 trainer Hawk jets and naval patrol boats from five European groups, including BAE systems and French arms firm Thales, which was then known as Thomson-CSF…Several top politicians and businessmen are said to have received kickbacks to help secure the contracts.

The opposition Democratic Alliance welcomed Zuma’s move, but said the new commission’s legitimacy will depend on its mandate and its composition…Read more.

South Africa: Zuma not channeling public contracts to relatives

CAPE TOWN/SOUTH AFRICA, 10JUN2009 -Jacob Zuma,...
Image via Wikipedia


JOHANNESBURG (AFP) – South African President Jacob Zuma’s relatives do not inappropriatly benefit from government contracts, a Zuma spokesman insisted Monday, following opposition charges of conflicts of interest.

The president “makes his annual declaration of interest… The declaration is designed to ensure that a conflict of interest does not arise in the performance of his executive office,” spokesman Mac Maharaj said.

South Africa’s main opposition Democratic Alliance (DA) party on Monday said laws regarding the business dealings of the president’s family members needed to be tightened as Zuma relatives were benefitting from “mega tenders.”

“The potential for the individuals closest to the president to be favoured in state deals is considerable,” the DA said in a statement…Read more.

South Africa: Enough with the secrecy

South Africa: temporary residence permit and s...
Image by Sem Paradeiro via Flickr


June 8, 2011

by George Mari

RECENT accusations levelled against KZN Human Settlement MEC Maggie Govender, citing evasiveness in failing to answer ongoing questions around the R1,6-billion Vulindlela housing project in the pro-vince amid further revelations that some of South Africa’s top political families are allegedly linked to the development company, merely scratch the surface of what the Democratic Alliance believes is a far more serious problem facing housing delivery in our province. Leading the charges made by the DA is the allegation that African National Congress president Jacob Zuma’s brother is a shareholder in the development company, Dezzo Construction. Meanwhile, fingers have also been pointed at senior politicians in our own KwaZulu-Natal provincial legislature….When government subsidies and funding are utilised, the project must go to public tender in terms of the Supply Chain Management process. In addition, the allocation of the management of R2,1 billion of public funds to a single company is not equitable in the context of the subsidised housing sector. The department has a responsibility in terms of procurement regulations to nurture and develop emerging companies in the sector, and yet it has allowed, through the VDA, a sum equivalent to a staggering 70% of its annual budget to be placed under the control of a single, established company. A tender of this magnitude — R1,6 billion — should never be awarded to a single entity. Read more….

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