Parliament, Wednesday, 25 May 2022 – The Portfolio Committee on Human Settlements has 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, Eastern Cape, Mpumalanga. This was 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 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 South Africa. “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 Ms Machwene Semenya, the Chairperson of the committee.
TALANA AND BURGERSFORT TEMPORARY RESIDENCES IN LIMPOPO
The committee welcomes the arrest of the Director of Aventino Group and is hopeful that 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.
The committee is also concerned that 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 R2 million 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.
EASTERN CAPE DEPARTMENT OF HUMAN SETTLEMENTS
With regards to the procurement of R300 million worth of temporary housing projects from four companies, the committee is concerned that while the procurement was tagged as emergency procurement, the SIU concluded that 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.
Regarding the HDA Temporary Residential Unit project at Duncan Village in East London, the committee raised concerns that although 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 653 734 (R64 441 per unit x 1 174).
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.
The committee has recommitted itself to working with the new board and management of the HDA to ensure effective oversight of its work.
ISSUED BY THE PARLIAMENTARY COMMUNICATION SERVICES ON BEHALF OF THE CHAIRPERSON OF THE PORTFOLIO COMMITTEE ON HUMAN SETTLEMENTS. MS MACHWENE SEMENYA.
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