Dodgy multi-million-rand PPE contracts unlawful and invalid

A Special Tribunal has ruled that two personal protective equipment (PPE) contracts worth a combined R9.12 million awarded by the Mpumalanga Department of Health were unlawful and invalid.

The contracts, awarded to Vitae Zoe (Pty) Ltd, covered the supply and delivery of 3,000 infrared non-contact digital body temperature devices, as well as an additional 1,000 devices, during the COVID-19 pandemic.

The Tribunal set aside the contracts following an application made by the Special Investigating Unit (SIU).

“This judgment marks a crucial step in addressing corruption and ensuring accountability in PPE procurement during the Covid-19 pandemic, as well as in recovering the losses the state has suffered,” said SIU spokesperson Kaizer Kganyago.

The Special Tribunal has directed Vitae Zoe (Pty) Ltd to improve its financial accountability, ordering the company to submit audited financial statements for the 2020/21 financial year to both the Tribunal Registrar and the SIU.

The company has since complied, and the SIU is now assessing how much must be repaid.

Vitae Zoe has been instructed to submit a repayment proposal within 15 days of receiving a formal demand from the SIU. Should it fail to do so, it could face further legal action.

The Tribunal also ruled that the company must pay the legal costs of the case.

The Covid-19 corruption feeding frenzy

In 2020, President Cyril Ramaphosa instructed the SIU to investigate allegations of corruption, maladministration, malpractice, and payments involving State institutions related to the Covid-19 pandemic response.

The investigation covered 5,054 contracts awarded to 2,686 service providers, amounting to R14.8 billion, which represented 11% of the total R138.8 billion COVID-19 expenditure from April 2020 to June 2021.

Of the 1,461 finalised contract investigations in late 2021, 555 (38%) were found to have irregularities, with a combined value of R3.1 billion.

Measures put in place by the government during Covid-19 included, among others:

• A R500-billion relief package.
• A social grant increase for over 16 million beneficiaries.
• Temporary Employer/Employee Relief Scheme for those whose salaries were affected.

Civil society group Corruption Watch (CW) warned in March 2020 of the vulnerabilities in the emergency procurement measures.

They noted that the R500-billion stimulus package “presented a fine opportunity for greedy officials to dip their hands into the COVID-19 cookie jar. Sadly, we were right.”

“The perpetrators of this corruption have been unashamedly brazen in their hijacking of the emergency measures put into place to deal with COVID-19 in South Africa… [which] have proved irresistible to those with thieving tendencies.”

Despite progress in cracking the whip, several challenges remain.

The slow progress at the National Prosecuting Authority (NPA) and delays in blacklisting have been criticised, with parliamentary committees like the Standing Committee on Public Accounts (Scopa) calling for faster action.

The fact that officials resign to avoid consequences and companies implicated in corruption continue to contract with the state has fueled public and political frustration.

It was described as “a crime against humanity” by former Scopa Chairperson Mkhuleko Hlengwa in September 2021.