Durban SAPS lease invalid - Public Protector

Thursday, July 14, 2011

Pretoria - Public Protector Thuli Madonsela has found that there was improper conduct and maladministration on the part of both the Department of Public Works and SAPS with regards to the leasing of a building in Durban.

Madonsela released her findings on Thursday after investigating allegations of improper conduct in the procurement of the lease for SAPS offices at the Transnet Building, to the value of R1.16 billion.

She also found that the lease agreement entered into by the Roux Property Fund and the DPW was invalid.

The lease, which Madonsela said was not subjected to tender processes, did not comply with the requirements of the Constitution, the Public Finance Management Act and Treasury Regulations.

The building was identified before determining the nature and need for accommodation and at R125.30 per square metre, was higher than the market rental rate of R40 per square metre.

Madonsela also found that there was no legitimate justification for deviating from the prescribed tender process.

"The fact that the procurement of the lease of the Transnet building was not budgeted for and not included in the Immovable Asset Management Plan of the SAPS, constituted maladminstration," she said in her report.

Madonsela clarified that the lease agreement for the Transnet building was signed between the Roux Property Fund and the DPW, and not by National Police Commissioner, Bheki Cele.

"Although the SAPS did not sign the lease agreement, its involvement in the procurement process was improper, as it proceeded beyond the demand management phase and it further failed to implement proper controls, as required by the PFMA and other relevant procurement prescripts," she said.

This failure amounted to unlawful, improper conduct and maladministration, Madonsela noted.

"The conduct of the accounting officer of the SAPS was in breach of those duties and obligations incumbent upon him in terms of section 217 of the Constitution, section 38 of the PFMA and the relevant Treasury Regulations.

"These provisions require an accounting officer to ensure that goods and services are procured in accordance with a system that is fair, equitable, transparent, competitive and cost effective. This conduct was improper, unlawful and amounted to maladministration," she said.

Madonsela also called on President Jacob Zuma to consider taking action against the Minister of Public Works Gwen Mahlangu-Nkabinde for her actions, which were referred to in the report.

The minister should also report to Cabinet on her actions on the procurement of leases of the buildings and her failure to cooperate with the investigations, Madonsela said.

She noted that the minister instructed the Director-General Sizwe Dongwana, despite legal advice, to continue with the lease for police quarters in Pretoria, after the DG had suspended the procurement process.

The DG also requested the KZN Regional Manager to proceed with the process to procure the offices for SAPS in Durban and to make the necessary submissions to the Special National Bid Adjudication Committee (SNBAC).

The SNBAC approved the lease, after which the DG added certain conditions which the KZN Regional Office did not comply with before signing the lease agreement.

"The decision of the SNBAC was taken after the Director-General reluctantly, and because of the pressures which he perceived to have been put on him by the Minister and Shabangu, gave an instruction that the process should continue. The majority of the evidence in this regard indicates that his perception at the time was not unreasonable," Madonsela said.

She added the minister's conduct in the procuring of the lease failed to meet the "requisite stewardship expected from her."

Madonsela called on the Department of Public Service and Administration, with the help of National Treasury, to take urgent steps to ensure that the appropriate action is instituted against the relevant DPW officials that acted in contravention of the law, policy and other prescripts.

In addition, the Police Minister, together with the National Treasury, should take urgent steps to ensure that appropriate action is instituted against the relevant SAPS officials.