How a R10,000 laptop costs R20,000 when the state provides - Gordhan

During his first appearance before the state capture commission on Monday, public enterprises minister Pravin Gordhan testified about a form of corruption that he said was rife in government and state-owned enterprises, and led to wastage of state resources.

Gordhan described his experience of how items that were cheaply and directly available from certain suppliers were sourced from third parties, which inflated the original cost to include commissions. 

Sometimes, explained Gordhan, the third party did not even manufacture the products or offer the services. The appointed middleman would have to go to yet another source, further increasing the cost.

"If you walk into a retailer, you paid R3 to R4 for a bottle of water. There will be any number of institutions that would be paying R30 to R40 for each bottle of water," said Gordhan.

Gordhan added that "similar price escalations would occur on other items as well".

"Laptop 'A' would cost you R10,000 [at a retailer] but go through Sita [the State Information Technology Agency], and you pay R20,000 for it. There are many such examples."

Commission chairperson, Judge Ray Zondo, noted with alarm that similar allegations of price inflation had come up in earlier testimony.

The judge expressed concern that taxpayers' money was spent in a seemingly unwise fashion.

To that, Gordhan responded: "The constant question, perhaps, that would help the commission is — who benefits from each of these events? Who benefits, where does the money go, who designs these processes and for whose benefit at the end of the day?" 

Gordhan said "individual acts of corruption were known". But "the connecting of the dots began late in 2016". 

"Spanning that period of 2015 to early 2017, the picture and the haze becomes clearer and the final penny drops, if you like, once the Gupta e-mails come into the public domain." 

Gordhan said the controversial e-mails provided "the evidence that so-and-so suggested such-and-such to a person of authority".

The explosive correspondence shed light on the influence of the Gupta family on cabinet ministers and state enterprises. 

Gordhan appeared at the inquiry for day two of his testimony on Tuesday.