Africa's Public Procurement & Entrepreneurship Research Initiative – APPERI


North Gauteng High Court

Armscor “bungling” leaves soldiers without necessary equipment in the DRC

Written by Kim Helfrich, Tuesday, 08 October 2013

Two examples of lengthy delays in awarding defence equipment contracts involving millions of Rand have, for the present, made unlikely bedfellows of Defence and Military Veterans Minister Nosiviwe Mapisa-Nqakula and shadow defence minister David Maynier.

The projects – Swatch, for a transportable camping system, and Porthole, for a high altitude parachute system – came to light in a sworn statement presented to the North Gauteng High Court last month. This was during an application by Lieutenant General “Mojo” Motau for reinstatement as Armscor chairman. He and his deputy, Refiloe Mokoena, were dismissed with immediate effect by the Minister in August. The court ruled both had to be reinstated, which is going to be appealed, Ministerial spokesman Sonwabo Mbananga told defenceWeb.

Maynier said court papers relating to Case number 51258/2013 provided clear evidence that Armscor “bungling” compromised the SA National Defence Force’s (SANDF) operational capability in the DRC.

“Both projects were delayed, for between 32 and 36 months, at a financial cost of R44 467 000 (Swatch) and R97 000 000 (Porthole) with the funding presumably ‘warehoused’ in the Special Defence Account. The bottom line is that, because of bungling at Armscor, SANDF soldiers do not have the equipment they need to execute their mission in the DRC,” he said.

Maynier also quoted what Minister Mapisa-Nqakula said during the August 14 meeting of the Armscor board as a further example of her frustration at the procurement agency’s inability to do its job.

“The biggest challenge we have right now as we deploy in the DRC is that our soldiers do not have tents, our soldiers have no parachute equipment. I mean there is just a whole list that was given to me and as Minister I think it would be totally irresponsible if I don’t put pressure on Armscor to at least do something about it. I can’t have a situation where we deploy our soldiers in the DRC in a very problematic area without the necessary equipment,” she is reported as having said at the Armscor board meeting.

Her remarks were supported by a statement from Department of Defence chief of defence materiel, Antonie Visser. He cited Swatch and Porthole as well as Vagrant, as unclassified projects of which details could be given to the court. Visser’s statement indicates he was asked by Secretary for Defence, Dr Sam Gulube, to prepare a report on various outstanding delays regarding the acquisition of defence equipment. The projects were Blesbok, Protector, Pantile, Swatch, Teamster, Bandsman, Vagrant, Porthole and Package.

“The projects and reports are classified but I have been permitted and requested to deal with three of the most important projects mentioned by the Minister in her letters terminating the appointments of the applicants (Motau and Mokoena),” his statement reads.

Project Vagrant is for the acquisition of protection technology for SA Air Force bases and deployed elements. It was approved by the Military Command Council in November 2004.

“After completion of the Armscor process to determine a preferred bidder, the Armscor submission was submitted to the Armscor board in November 2011 for approval to continue with the contracting process. There are varying reports as to whether the submission actually served at the board of directors or not. However, no decision was made thereon,” Visser’s statement reads in part.

Project Vagrant and other projects were the subjects of a Department of Defence/Armscor work session in June this year. According to Visser “both parties agreed to disagree” and the issues would go to the Secretary for Defence and the Armscor board to seek Ministerial intervention for a mutually acceptable agreement.

Project Swatch officially started in December 2010 when a request for information was issued for the supply of a transportable camping system. Offers were received and an evaluation made after which it went to the Armscor board on three occasions without any decision being made.

The project study report for Porthole was approved in November 2010 and a request for proposals from industry went out in June 2011.

“After more delays a submission finally served at the Armscor board in February 2012. The board did not approve the bidder due to non-BBBEE compliance.”

Maynier again quotes Mapisa-Nqakula at the August Armscor board meeting adding he will be asking “hard questions about Armscor’s failure to implement defence acquisition projects, vital to the SANDF’s mission in the DRC” when the Armscor board appears before the Portfolio Committee on Defence and Military Veterans this Thursday.

“The Minister’s frustration with Armscor’s bungling is evident when she states ‘millions upon millions of Rand budgeted by the Department of Defence for the acquisition of defence materiel are not spent annually, with the result that the Department will find it increasingly difficult to justify more funds being made available to it for acquisition’,” he said quoting Mapisa-Nqakula.

DA asks protector to probe e-tolls ‘link’ to arms deal companies


May 3rd, 2012

Probe demanded into possible connections between companies involved in arms deal and the company that runs the e-tolling system.

THE Democratic Alliance (DA) has asked Public Protector Thuli Madonsela to investigate controversial contracts relating to the collection of e-tolls in Gauteng.

“Suspicion is high that politically connected people may have benefited from the toll companies contracted to the South African National Roads Agency (Sanral),” DA MPL Jack Bloom said in a statement on Thursday.

He added: “Widespread public concern needs to be allayed by a full investigation by the public protector.”

On Wednesday, the Congress of South African Trade Unions demanded an investigation into possible connections between companies involved in South Africa’s arms deal and the company that runs the controversial e-tolling system on the Gauteng Freeway Improvement Project.

While they are not conclusive of wrongdoing, links between the corruption-tainted arms deal and the unpopular e-tolling plan will add to the stiff opposition that the government is facing from business, unions and civil society.

Websites have been buzzing with allegations of links between Swedish companies involved in the arms deal and the Vienna-based Austrian company Kapsch TrafficCom.

Kapsch TrafficCom is the largest shareholder in the Electronic Toll Collection (ETC) joint venture, which won the R1,1bn project from Sanral in 2009, along with Traffic Management Technologies, a local company.

“In giving the background to his interdict against the e-tolls, Judge Bill Prinsloo criticised Sanral for its secrecy on the contract with the ETC consortium,” Mr Bloom said on Thursday. “There are also 35 sub-contracts with ETC, all with confidentiality clauses.”

On Saturday in the North Gauteng High Court, Judge Prinsloo granted an urgent interdict, brought by the Opposition to Urban Tolling Alliance, to stop the e-tolling system so that a full court review could be carried out to determine whether it should be scrapped.

The judge said that while he realised Sanral would suffer huge financial losses, the public would also suffer hardship if the controversial project went ahead.

The ETC consortium will install and operate the toll system on the upgraded highways. When the contract was signed, Kapsch — both its Austrian and Swedish arms — held 65% of the company and TMT owned 35%.

Sanral CEO Nazir Alli said last year the Kapsch consortium had tendered the most competitive bid, which also had the largest South African composition.

However, the next year Kapsch TrafficCom “invested” in TMT, which resulted in the company owning 57% of TMT.

The Swedish and Austrian arms of Kapsch owned most of the ETC consortium, but it appears the Swedish unit owns the lion’s share. Kapsch TrafficCom holds 40% of ETC while Austrian principal Kapsch has the remaining 25%.

The Swedish arm was previously part of Swedish manufacturing company SAAB and later became part of Kapsch AG.

SAAB, which sold 28 Gripen jet fighters to South Africa in the arms deal, sold a subsidiary called Combitech Traffic Systems to Kapsch. That company had already been involved in several toll-road contracts, including Marianhill Plaza in Durban.

One of its partners in these toll contracts was Kobitech, owned by Schabir Shaik, who was jailed for arms deal corruption. Most of Shaik’s business interests were in toll roads and electronic licensing contracts handled by the Department of Transport.


South Africa-Net1 to approach constitutional court in response to supreme court ruling

south african flag from the constitutional court
Image via Wikipedia March 25, 2011

JOHANNESBURG, SOUTH AFRICA- Net1 UEPS Technologies Inc. (“Net1” or “the Company”) (NASDAQ:UEPS)(JSE:NT1) today announced that its wholly owned subsidiary, Cash Paymaster Services (Proprietary) Limited (“CPS”), intends to apply for leave to appeal the South African Supreme Court of Appeal’s recent judgment on March 11, 2011, which overturned a lower court judgment delivered on December 10, 2009, prohibiting the South African Social Security Agency (“SASSA”) from contracting the South African Post Office (“SAPO”) to render banking or payment services relating to social grant beneficiaries. The lower court, the North Gauteng High Court, had ruled in a suit commenced against SASSA by CPS that SASSA had not followed a proper procurement process to comply with the South African Constitution and the Public Finance Management Act (“PFMA”) when the previous executive management team at SASSA contracted with SAPO for the payment of grants in 2009. Read more


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