South African taxpayers spent R40 million on a fence that doesn’t work – what went wrong

The Department of Public Works and Infrastructure (DPWI) has come under fire for drastically overspending on the Beitbridge border fence project.

The 40km stretch of fencing between South Africa and Zimbabwe was initially completed in May, but the project was marred by issues since inception, including questions around its procurement and the theft of fencing materials.

Announced in March, Public Works minister Patricia De Lille said the fence was in line with a raft of interventions announced by President Cyril Ramaphpsa when he declared the coronavirus pandemic a national disaster.

In a parliamentary presentation on Tuesday (18 August), the DPWI said that the VAT-inclusive contracted amount for the border fence project was R40.4 million.

This was comprised of R37.2 million for construction and R3.2 million for professional services and project management.

However, De Lille said that at all times, the cost of the project communicated to her was in the region of R37 million, and that it was only much later that officials informed her of the additional cost for the principal agent, which led to the actual total projected spend being R40.4 million.

What the investigation showed

An investigation into the deal revealed a series of procurement and other irregularities perpetrated during the infrastructure delivery process.

This includes possible acts of fraud perpetrated by identified officials of the department and the border fence project service providers, the DPWI said.

“These irregularities relate to the irregular application of emergency procurement and payment processes by the DPWI with respect to both the appointment and payments made to the contractor and principal agent respectively.

“The investigation found that as a result of the irregular application of the emergency procurement process, the resultant awards are invalid and payments made against the contract would be irregular.”

The investigation also found that an advance payment of R21.8 million to the contractor and R1.8 million to the principal agent within days of their respective appointments was wrong, as no material was delivered and construction had not commenced.

Procurement failures, technical problems and pricing issues

The investigation showed that the department also failed to ‘test the market’ to at least determine the reasonableness of the contractors pricing.

The procurement framework of bid specification, evaluation and adjudication was not properly followed, it said.

“Furthermore, an assessment conducted by the Professional Review Team, of the items in the Bill of Quantities (BOQ), Drawings, and Specifications and the work ‘as built’ indicated that they were not aligned.

“The assessment also found that the fence is not in compliance with the drawings and the specifications.

The investigation showed that there were also ‘significant anomalies’ in the value for money assessment conducted.

The total project cost, which includes both construction and engineering fees, for the contract was R40.4 million.

“Although the contracted amount was ostensibly calculated at 2016 prices based on an earlier contract, the evaluation indicated that some of the items quoted were in fact not based on these 2016 prices.”

This includes site establishment costs exceeding R1 million, which should not have been charged, and excessive units rates for specific items, the investigators said.

“Using the 2016 contract rates – at which this project was contracted, the assessment found that the overall total project cost should have amounted to R26.1 million; it was therefore overpriced by R14.3 million.

A further assessment using market-related prices for materials actually used on-site and revised fees for engineering services provides for a total project cost of R23.4 million. This indicates that project cost was exceeded by an amount of around R17 million.

“This also reflects the real risk to the DPWI of having failed to test the market. The 2020 market comparison also indicates that the 2016 rates were inflated at the time.

The fence doesn’t work 

The investigation also revealed that poor construction practices compromised the effectiveness of the fence as a deterrent for crossing the South African border with Zimbabwe.

The barbed wire coils were stretched beyond its recommended effective limit, also making it easier to scale the fence. These factors undermined the effectiveness of the fence to mitigate border threats.

A technical assessment also found that significant elements of the border fence project were not implemented at all.

For example, the design of the fence had a final height of 2.2 metres and the final actual height of the fence reached no more than 1.8 metres on either side of the border, making it more easily scalable.

“During our site visit on the 4th and the 5th of May 2020, we recorded at least 115 breaches of the fence which may have resulted in an untold number of unlawful crossings between South Africa and Zimbabwe,” the investigators said.

“The construction of the fence is also in material breach of the conditions of the Provisional Site Clearance Certificate (PSCC) including breaches of environmental regulations, as well deviations from the approved line of construction.”

Given the non-compliance with aspects of the design specification and poor construction practices, as well as the absence of a combined strategy to prevent unlawful crossings within the range of the existing project, the investigation team said it considered the fence ‘not fit for purpose’ and current payments in this regard may already be regarded as fruitless and wasteful expenditure.

Disciplinary charges

The investigators made the following recommendations:

  • Disciplinary charges have been recommended against 14 senior officials of the DPWI as a result of a range of alleged acts of misconduct;
  • The fence should be processed in terms of the presidential proclamation mandating the SIU to investigate Covid-19 related project;
  • The department should register a criminal case for fraud against the principal agent, main contractor and designated officials for misrepresenting to the DPWI that project progress was achieved;
  • The principal agent and the main contractor must be restricted from doing business with the government;
  • As the constructed fence deviates from the approved border fence line and is in material non-compliance with Environmental laws, it is recommended that the DPWI should report these to and consult with the Department of Environment, Forestry and Fisheries (“DEFF”) so as to correct non-compliance in this regard;
  • Any further border fence initiatives should be outlined in the recently signed the Border Management Authority Act of 2020.

Read: The R2 trillion warning for South Africa

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South African taxpayers spent R40 million on a fence that doesn’t work – what went wrong