Nxesi pulls out all stops to end corruption

Wednesday, March 6, 2013

Pretoria – The Department of Public Works is pulling out all the stops to stamp out corruption and at the same time rebuild its image.

In a hard-hitting message to government officials and employees of the Department of Public Works,  Minister of Public Works, Thulas Nxesi, on Wednesday warned that some heads “would roll” in the next few days as a result of investigations by the Special Investigations Unit.

This in an unprecedented drive to rebuild the department - where corruption is combatted and the department focusses on its core mandate.

The SIU was requested to assist the department in terms of proclamation R38 of 2010, published in the Government Gazette on 30 July 2010. The focus areas included specific contracts and tenders; leasing of buildings for client departments; prestige accommodation and general procurement irregularities.

“The SIU investigation has already made major progress and is continuously assisting the department to identify, investigate and redress improprieties including but not limited to fraud, corruption and maladministration within the Supply Chain Management component of Public Works with the aim of identifying systematic weaknesses; procurement irregularities; corrupt practices; recovering any losses identified; and facilitating the instituting of criminal and/or civil action where appropriate,” said the minister.

He said as a result of the investigations, one Deputy Director General had been dismissed and a former Acting Director General and the Head of Property Management were facing disciplinary hearings. 

The SIU has investigated approximately 40 cases of which about 13 have been finalised and their recommendations implemented.

“High profile cases of alleged over-pricing in relation to leases, renovations of ministerial houses and security provisions for the residence of the President, as well as the findings of the Competition Commission in relation to the construction sector, all tell the same story: collusion and corruption are endemic within some elements of the Department of Public Works and certain sections of the property and construction industry,” said Nxesi.

He said it was enough to lament. “It cannot be business as usual.”

Cases completed by the SIU include:

-       Braamfontein leases - Corruption that resulted in the Department paying R28 million for six unoccupied buildings.  The department has begun civil proceedings against the landlord to recover the R28 million. Two officials were implicated - one was dismissed and the other resigned before the disciplinary hearing. Criminal investigations against the former officials and landlord are underway.

-       116 Herbert Baker Lease – the lease was procured irregularly. The Head of Property Management is facing a disciplinary hearing. The department is seeking to recover an amount of R6.3 million.

-       Skilpadhek Border Post Settlement Investigation - Corruption resulted in the department unjustifiably paying an amount of R50 864 592.58. The department has instituted civil proceeding to recover the R50 million and criminal investigations are underway.

-       Skilpadhek, Golelo, Lebombo Border Posts – There was an irregular appointment of a programme management firm that resulted in fruitless and wasteful expenditure of R3.5 million. The payment was made without supporting documents. Seven officials are to face disciplinary action for authorising payments without supporting documentation.

-       114 Vermeulen Street - Independent Police Investigation Directorate – The lease was procured irregularly, fraudulently and through fronting. Two officials are facing disciplinary hearings. A criminal case was reported to SAPS. The department also instituted civil proceedings to declare the lease invalid. The matter is before the High Court.

-       SAPS Lease Middestad – The lease was procured irregularly. The department has approached the High Court to declare the lease invalid and the matter is pending.  The former Acting Director General was suspended and a disciplinary hearing completed. The department has saved R780 millions.

-       SAPS Lease: Transnet – The lease was awarded irregularly and was subsequently cancelled. The Department saved R1.86 billion.

-       Prestige – Pretoria - The SIU has completed its investigation into the Prestige Portfolio in Pretoria involving renovations of ministerial houses. The investigation revealed that approximately R27 million was spent to renovate houses with R4.7 million paid without supporting documents. Like many projects at the department, the investigation found that bills of quantity were excessively inflated and supply chain prescripts were not complied with in appointing service providers. Implicated officials will face disciplinary processes for fruitless and wasteful expenditure. The department will institute civil proceedings to recover the money unjustifiably paid.

The minister said he had recently requested the SIU to focus on construction projects which include the Prestige Portfolio in Cape Town, in particular the high cost of renovating ministerial houses.  “Our investigation has revealed amongst other things, that an amount of approximately R100 million was spent on renovating eleven houses. I suspect that similar irregularities of corruption, inflation of bills of quantity and fruitless and wasteful expenditure are likely to be discovered,” said Nxesi.

He had started an investigation into the renovation of the Central Government Office building that is the Head Office of Public Works in Pretoria.  “Preliminary investigation has shown that the initial budget for the contract to renovate the building in 2009 was R59 million. However, when the project was completed in August 2011, the cost had sky-rocketed to R325 million.”

Nxesi said 23 further cases are still being investigated by the SIU.

“We are in the process of approaching the President to extend the proclamation for the SIU to focus on capital projects. DPW spends about R150 million a month on capital projects, therefore this concern should be addressed urgently.”

Regarding the Nkandla security upgrade of the Presidential private residence, the minister said he was working closely with the SIU.

“I established a multi-departmental task team to conduct a preliminary investigation into the construction work at the Nkandla residence. The findings and recommendations of the task team have been announced. I have since met with the SIU to request them to further investigate the matter,” he said.

There was a zero tolerance approach to corruption within the department, said Nxesi, adding that enhancing investigative and forensic capacity in the department to enforce compliance would certainly have a deterrent effect.

He said it was important to put in place transparent and robust supply chain management systems which make it easy for “weak people to do the right thing, and difficult for bad people to do the wrong thing”.

The department is working closely with National Treasury, anf other departments to jointly reviewing all lease agreements.

At the end of last year, National Treasury agreed for the department to re-direct unspent capital expenditure for the purposes of turning around the department. This was based on a jointly agreed seven-year plan.

The minister said already, through the Internal Audit Unit, the department has completed 19 internal investigations into allegations of impropriety and are currently undertaking a further 53 investigations.

“In this way internal capacity is being developed – and specifically funded by National Treasury as part of the Plan to Rebuild Public Works,” said Nxesi.

He said the department would establishment of a dedicated Supply Chain Management Branch, establish a separate Risk Management Branch which will include a specialised Compliance and Investigative Unit and financial and procurement systems are being reviewed and strengthened to guard against fraud and corruption.

“As part of our current endeavour to achieve a clean audit, a sample of 10% of construction projects will be interrogated/inspected in detail with a view to picking up any irregularities,” said the minister.

He said there was still a long way to go. “Rebuilding Public Works is a process not an event. Those who have illicitly gained from the previous chaos in DPW will resist change, but only the guilty need fear the turnaround process. The vast majority of staff is actively participating in the plan to Rebuild Public Works.”

Nxesi said his job now was to create an environment in which the majority of officials and employees of DPW – who remain committed to service delivery – were able to use their skills and experience to good effect.

“It is crucial that we grasp this point: that in the days ahead, as heads roll as a result of the findings of the SIU investigations, we are simultaneously rebuilding Public Works – putting in place the framework necessary to combat corruption and allowing the Department to focus on its core mandate and service delivery,” said the minister. – SAnews.gov.za