Bosasa contracts part of Acsa’s irregular expenditure

The Airports Company SA (Acsa) has confirmed that contracts with Bosasa, the company implicated in the R500,000 donation to President Cyril Ramaphosa's ANC presidential campaign, form part of its irregular expenditure of R544m for the 2017/18 financial year.

Acsa has flagged corporate governance as one of the challenges facing the state-owned company, which operates the major airports in the country.

Bosasa, which has been renamed African Global Operations, has been the beneficiary of multibillion-rand contracts with the state and has been implicated in widespread allegations of corruption.

African Global Operations CEO Gavin Watson’s donation of R500,000 to Ramaphosa's ANC presidential election campaign has landed the president in hot water because he gave incorrect information to parliament, saying that the only money received from the company was that paid to his son Andile for services rendered under a contract.

Acsa has notched up cumulative irregular expenditure of R1.1bn. Irregular expenditure is expenditure that has been incurred in a way that is not compliant with legislation, mainly with the Public Finance Management Act.

The auditor-general said information related to three contracts could not be provided for audit purposes.

Business Day's sister publication TimesLive reported that Bosasa Security had received three payments amounting to R3m without any documentation showing its contract had been extended. Another security company, G4S, was red-flagged for five payments amounting to more than R6m, while Kwenda Marketing scored R4m. 

Acsa spokesperson Hulisani Rasivhaga said the three contracts with Bosasa were deemed irregular expenditure because the contract extensions were not approved by all of the required delegated bodies. 

“In these three instances the bid adjudication committee approved an extension of three months. However, Airports Company SA’s delegated levels of authority at that time also required approval of the executive committee for extensions and this approval was not obtained.”

There were no allegations of corruption against Acsa staff in relation to these contracts.

Then acting Acsa chair Deon Botha said in his statement in the 2018 annual report that “the governance of procurement has come under public scrutiny in the past year, and rightly so, because this is where failures of governance and incidents of corruption often occur. We acknowledge that this is an area of our business that requires improvement and we have placed tremendous effort into overhauling our supply chain operating model and processes. Matters relating to corporate governance and procurement pose a risk to the company and its reputation.”

CEO Bongani Maseko noted that Acsa was "still experiencing areas of non-conformance to supply chain management policies and procedures and, in some cases, non-conformance to relevant legislation".

Advocate Sandile Nogxina was appointed Acsa chair by cabinet last week.

ensorl@businesslive.co.za