All of KwaZulu-Natal’s Covid-19 emergency spending has been centralised under the provincial treasury after the controversial purchase of R22-million of blankets by the social development department.
KwaZulu-Natal Premier Sihle Zikalala has also promised swift action when an investigation he appointed into the transaction by the provincial treasury is completed, should any officials be found to have acted unlawfully or irregularly.
Opposition parties and the South African Communist Party have welcomed the investigation, with the latter urging Zikalala to probe claims that prices were inflated to benefit business people close to senior officials in the department.
Social development, headed by MEC Nonhlanhla Khoza, purchased the 48000 blankets, as well as sanitisers, soap and other hygiene equipment, for distribution to the province’s 12 districts, days before the lockdown kicked in on March 26.
A total of R40-million was spent in three days; R22-million on blankets and the balance on sanitisers, soap and other hygiene products, for distribution to the district municipalities and the eThekwini Metro.
None of the purchases were made directly from manufacturers, but instead from a number of middlemen, who added their mark-up after purchasing the blankets, sanitisers, soap, face cloths and hand pumps from manufacturers.
According to the department, it paid the four distributors between R450 and R550 a unit for the 2.1m wide and 2.4m long 4kg mink blankets, about 36000 of which had already been delivered. The balance, valued at R6-million, are still to be delivered to the department, which awarded the contract without a tender, using emergency powers in terms of treasury regulations.
A search by Mail & Guardian this week found blanket manufacturers selling single blankets online for R350 a unit. All of them offered discounts for larger orders. One manufacturer contacted offered a significantly lower price — about R250 a unit — for 48000 blankets.
Spokesperson Mhlaba Memela said the blankets would be distributed to homeless shelters set up during the Covid-19 crisis and to replenish the department’s stock of blankets for the elderly, the indigent and other people in need during disasters.
The four companies, Zain Brothers, Gibela Investments, LNA Communications and Rosette Investments, had been selected from a treasury database, Memela said. A fifth, Ngcome Steam Pot, was appointed to supply sanitisers and other hygiene provisions.
On Monday The Witness reported that a director of Ngcome Steam was the fiancée of a deputy director in social development MEC Nonhlanhla Khoza’s office.
Memela said he was unable to comment on the relationship between the deputy director and the director of Ngcome Steam, but that all of the small and medium enterprises that had been awarded the contract had been checked to ensure that their spouses did not work for the government.
Memela said Khoza had been “concerned” about the allegations and welcomed the probe initiated by the treasury. In a presentation to Cabinet last week, social development chief financial officer Brian Ndaba said the department had made the emergency purchase as “items needed to be delivered before the lockdown to minimise social contact”.
Ndaba said the department had paid between R460 and R490 a blanket during July 2019 following tender procedures but that its stock had been depleted. Blankets were also needed for the department’s usual distribution to needy people and the elderly during winter.
However, two senior sources in the provincial government said that the explanation was not accepted by the Cabinet, which resolved that all Covid-19 emergency spending by departments would have to be approved by the treasury.
“The explanation was not well received. Cabinet wanted a serious investigation done to get to the bottom of the matter quickly. There was also a decision that all further emergency funding would have to be approved by the provincial treasury, to prevent any further embarrassment to the provincial government,” one source said.
On Wednesday, Zikalala confirmed in a television interview that the treasury probe had been appointed. He said the provincial Cabinet had been “very worried” over reports of corruption in the procurement and were “not satisfied” with the initial explanation. Zikalala added that they were awaiting a report from the treasury so that “we can act swiftly”.