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Human settlements portfolio committee calls for prosecution after irregular procurement for Covid-19 temporary shelters

26 May 2022 - 08:43
The Special Investigating Unit and the Housing Development Agency issued a report on irregular procurement processes for Covid-19 temporary shelters.
The Special Investigating Unit and the Housing Development Agency issued a report on irregular procurement processes for Covid-19 temporary shelters.
Image: 123RF/Olivier Le Moal

Parliament's human settlements portfolio committee on Wednesday called for the prosecution and recovery of “ill-gotten money arising from the wanton disregard” of procurement processes related to various projects connected to emergency Covid-19 temporary shelters in Limpopo, the Eastern Cape and Mpumalanga.

This came after the committee received a report from the Special Investigating Unit (SIU) and the Housing Development Agency (HAD) on irregular procurement processes.

The committee also called for the conclusion of prosecution and internal disciplinary processes related to projects in the Free State, Limpopo, and Gauteng.

“The committee considers the disregard of procurement processes unacceptable, unethical, and self-serving and to the detriment of the people of SA. The committee is further of the view that emergency procurement does in no way authorise corruption and non-adherence to policy and process. Prosecution and consequence management are the only tools that will ensure that this impunity is dealt with adequately,” said committee chairperson Machwene Semenya.

In respect of the temporary residences in Limpopo, the committee welcomed the arrest of the director of Aventino Group and was hopeful there will be effective prosecution for fraud.

“The committee is concerned by the misrepresentation and fraud related to the project but welcomed the process to recover the R2,577,640 already paid to the company. Furthermore, the committee has highlighted the need for the urgent processing of the process to place the company on a database of restricted suppliers so that it is prohibited from getting further contracts from the state,” it said.

In Talana Hostel in Greater Tzaneen only 40 of the 192 temporary structures were built.

“Furthermore, these structures are unsafe and pose a public health and safety hazard to inhabitants. Meanwhile, in Burgersfort Ext 10, invoices to the value of R2m were paid for half-built structures. A lack of proper project planning and monitoring is the primary reason that the state has had to pay large sums of money with no delivery of services. The committee is also concerned that the bid evaluation and adjudication committees did not conduct due diligence on team members’ CVs, qualifications, and credentials of the awarded bid and accepted the information at face value.

“The committee has urged the National Home Builders Registration Council to urgently conclude its administrative action against Aventino Group for unethical behaviour,” the committee said.

In the Eastern Cape the procurement of R300m worth of temporary housing projects from four companies was tagged as emergency procurement.

The SIU concluded the procurement was not an emergency.

“The committee is also concerned that at the end of the investigation only 346 units out of 1,800 units were built. The committee welcomes the decision that the SIU is preparing a civil litigation process to cancel the contracts,” the committee said.

The HDA temporary residential unit project at Duncan Village in East London, raised concerns because though the contract was for the urgent construction of 1,174 units to address de-densification during the pandemic, a year later less than 486 units have been constructed at a cost of R75.6m , costing R64,441 per unit.

“The committee is also concerned that over and above the irregular procurement process in awarding Covid-19 interventions made by the Buffalo City Metropolitan Municipality, overpayments of R1,505,241.50 were made to contractors. The committee has called for the SIU to speed up processes to recover those resources to ensure that they are redirected to service delivery initiatives. The committee has also called for the department and the HDA to conclude internal disciplinary processes.

“Regarding the audit action plan at the HDA, the committee welcomed the work done by its new board and the department to rectify some of the malfeasance at the entity to ensure that it is focused on delivering its mandate. The committee has highlighted the urgent need to ensure consequence management against officials who have contributed to irregular expenditure where there is a possibility of fraudulent, corrupt, or other criminal conduct, to ensure that the credibility of the HDA is restored,” said the committee.

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