The Department of Environmental Affairs said it will appoint independent auditors to examine the circumstances around the sale by public auction of one of its marine patrol vessels for about R300 000.
”The audit will be completed this week,” department spokesperson Blessing Manale told the South African Press Association on Monday.
This follows media reports on the weekend that the patrol vessel, the 50m Eagle Star, which had recently undergone a R3,5-million refit, was sold for R302 738.
According to the Sunday Times, the man who bought the vessel at the auction immediately recouped R230 000 by selling the diesel left in her fuel tanks.
Manale said approval for the sale of the Eagle Star was given by the deputy director general of environmental affairs’ marine and coastal management (MCM) division, Monde Mayekiso, on May 22 last year.
It had been ”entirely his decision”, he said.
”The disposal of obsolete equipment and assets is … within his competency in terms of the PFMA [Public Finance Management Act].”
The auction took place in November last year. There were reportedly only two bidders at the event.
Asked if Mayekiso had not seen fit to place a reserve price on the vessel, Manale said it had been decided not to do so at the time because this might have put people off bidding.
”The department will appoint an external audit-verification firm to look into the auction,” he said.
This would include looking at the price obtained for the vessel, the choice of auctioneer and advertising of the event.
Earlier on Monday, the Democratic Alliance (DA) said it would ask the Auditor General (AG) to investigate the auction.
”It has emerged the marine and coastal management branch … has cost the taxpayer millions of rands, following the sale of a patrol ship … for a meagre R302 738, an amount significantly lower than the ship is worth,” DA maritime spokesperson Marius Swart said in a statement on Monday.
He said the DA would write to AG Terrence Nombembe and ”request that the matter be given special attention when auditing the department’s finances this year, and that he makes the relevant recommendations to the Standing Committee on Public Accounts when next the department is due to appear before the committee”.
At the very least, it should be made known how a government asset could have been sold at a price massively lower than its market value, he said.
”Government officials responsible for state assets bought with taxpayers’ money should know that they are accountable for their actions.”
The DA had obtained information from an independent source estimating the value of the ship at R8-million when it was acquired in 2003.
”The ship has since been upgraded and equipped with a vessel-monitoring system, radar and IT and satellite facilities, allowing her to carry fishery control officers for operations and training purposes.
”It is apparent that this transaction is the result of the MCM’s dismal management and gross incompetence, the financial consequences of which the taxpayer will now have to bear.
”How else do you explain the sale of a recently renovated ship in pristine condition at an enormous loss?” Swart asked. — Sapa