Minister mulls tender-fraud report

The Special Investigating Unit (SIU) has handed Correctional Services Minister Nosiviwe Mapisa-Nqakula a docket on what may be one of South Africa’s largest cases of state tender fraud to date.

Mapisa-Nqakula’s spokesperson confirmed this week that the SIU had finalised its investigation into the awarding of tenders worth over R1-billion by the prisons department and that it was currently on Mapisa-Nqakula’s desk.

“[Mapisa-Nqakula] is currently considering the contents of the report as well as its recommendations in so far as such recommended actions are within the power of the department of correctional services and the ministry,” said Sonwabo Mbananga, the minister’s spokesperson.

The bulk of tenders scrutinised by the SIU was awarded to controversial facilities management company Bosasa Operations and companies within the Bosasa group during the tenure of former prisons boss Linda Mti.

Mti is currently heading the security department for the Soccer World Cup local organising committee.


Bosasa is headed by the politically connected Eastern Cape businessman Gavin Watson.

The Mail & Guardian reported in July that the prisons department’s contract with the SIU had lapsed on March 31 and that it was not renewed by Mapisa-Nqakula or suspended prisons boss Xoliswa Sibeko. By then the minister had not received the final investigations report from the unit and her spokesperson did not rule out the possibility that a new deal with the SIU may be negotiated.

It is not yet clear what the SIU’s findings were, but Mbananga gave a hint in his statement by saying: “The Special Investigation Unit will interact directly with the National Prosecuting Authority (NPA) should further actions such as criminal prosecutions be necessary.”

Legislation governing the SIU makes provision for the institution of civil proceedings by the affected department against service providers and government employees found to have defrauded the state.

The SIU is also obliged to hand to the NPA any evidence of alleged criminal conduct for possible prosecution. The NPA may then decide whether further investigation by the police is necessary.

Former president Thabo Mbeki mandated the SIU to probe allegations of tender-rigging in the prisons department when he signed a proclamation authorising the investigation in November 2007.

In February the M&G revealed the extend of the corrupt relationship between Bosasa and the prisons department by publishing email correspondence between a senior Bosasa employee and the department’s former finance chief, Patrick Gillingham.

The documentation proved that Bosasa had access to tender documentation for various prisons contracts totalling hundreds of millions of rands before other suppliers.

Mapisa-Nqakula also indicated this week that she was not yet sold on the idea of her department funding the construction and operation of four privately-owned prisons. After reports that she had cancelled the tender process for the construction of prisons in Paarl, Nigel, Klerksdorp and East London, Mapisa-Nqakula reacted speedily by saying she cannot “interfere with a legal government process”.

However, she listed numerous difficulties with the model whereby private consortiums would build and run the facilities, and government would pay them off over a period of years.

This is a serious diversion from the Mbeki’s regime’s commitment to build more prisons to take the pressure off heavily overcrowded facilities. Since 2004 Mbeki included the building of prisons as an example of government’s job creation in his state of the nation addresses.

Mapisa-Nqakula will take into account issues such as healthcare, safety and education in determining the future of the projects.

Bosasa Operations is part of one of the four consortiums gunning for the prisons contracts. The Umtya Nethunga consortium is led by construction company Group Five and the American corrections management firm MTC.

Mapisa-Nqakula is yet to report back to Parliament on the outcome of an investigation done by the Public Service Commission into allegations of impropriety against Sibeko. The prisons boss was suspended in July after it was revealed that she rented a private house in the upmarket Woodhill Golf Estate in Pretoria while her official residence in Pretoria was empty.

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