The Special Investigating Unit (SIU) has welcomed a Special Tribunal ruling that has set aside an R85 million contract.
Image: Screenshot / SIU YouTube
Two construction companies that were awarded a tender as a joint venture to construct a Jersey Barrier Wall along the Mozambique/KwaZulu-Natal borderline are in trouble as the Special Investigating Unit (SIU) wants them to repay millions of rand they profited out of the project.
The ISF Construction Services and Shula Construction were awarded the R85 million tender under the ISF Shula Joint Venture by the KwaZulu-Natal Department of Transport to put up the wall along the border line to prevent cross-border crime.
During his 2017 visit to the region, then-president Jacob Zuma, accompanied by his deputy Cyril Ramaphosa, officially announced the project to construct the wall. This followed engagement between the two leaders and the communities of uMkhanyakude, Hlabisa, and Jozini municipalities, as well as local police, who expressed concerns about rising crime levels.
During the two leaders' visit, SA National Defence Force members used huge rocks to seal routes criminals used to move vehicles stolen and hijacked in KwaZulu-Natal to Mozambique.
In a statement released on April 24, the SIU flagged the tender as irregular following its investigation into why the wall's construction remained incomplete despite the joint venture having been paid.
It further referred the tender to the Special Tribunal, which subsequently set it aside.
“The SIU investigation revealed that only 5.29km of the planned 8km wall was erected, with significant associated works left unfinished.
“The Tribunal’s ruling underscores the constitutional imperative that government procurement must be fair, transparent, competitive, and cost‑effective. The SIU will now pursue recovery of the monies paid, ensuring that public funds are restored to the state,” read the statement.
Part of the wall, which had already been built up, brought relief to communities living near the border as they felt it reduced vehicle hijacking into Mozambique.
However, through a Proclamation R.16 of 2021, Ramaphosa, as the president, directed the SIU to launch an investigation into the construction following allegations of irregularities surrounding the tender.
The Tribunal found in the SIU’s favour, ruling that ISF Shula had secured the tender using a fraudulent B-BBEE certificate and an expired Letter of Good Standing.
Shula’s lawyers, MB Pedersen & Associates, could only state that their client has noted an appeal against the judgment to the High Court in Pietermaritzburg. But the lawyers could not say who launched the appeal.
“Due to attorney-client confidentiality, I cannot give you any other information without my clients' consent and have forwarded your email to them for instructions as to what statement, if any, they would like to make.
“Should they instruct me to furnish you with any further information or a statement, I have your email and will make contact accordingly,” read the attorney’s response.
ISF said it will respond in due course as the matter is currently being handled by its legal team.
It remains unclear whether actions were taken against the provincial Department of Transport, as the SIU has not responded to a request for further information regarding the matter.
The department has also not responded to questions sent to its spokesperson, Ndabezinhle Sibiya. These questions included why the department took responsibility for funding the wall's construction when border management is the responsibility of the Department of Home Affairs’s Border Management Authority (BMA).
The SIU said the department commissioned the construction of the wall in response to the community’s concerns about rampant cross-border crime, particularly the smuggling and trafficking of stolen and hijacked vehicles into Mozambique.
However, instead of delivering on this urgent public safety measure, the joint venture submitted fraudulent documents, failed to meet mandatory requirements, and left the project incomplete despite receiving R84 million, the SIU said.
“Only 5.29km of the planned 8km wall was erected, forcing the department to tender at an additional cost of R62 million for another company to complete the wall,” the SIU said.
It has since directed the joint venture to repay the profit it generated from the tender.
“As part of the order, ISF Shula Joint Venture has been directed to repay all profits derived from the contract to the SIU. An independent expert will be appointed by ISF Shula Joint Venture to determine the amount of these profits.
“The SIU will review the findings, and if there is a dispute, the matter will be referred back to the Tribunal for determination. Furthermore, ISF Shula Joint Venture has been ordered to pay the legal costs,” the statement read.
The SIU described the Special Tribunal judgment as a validation of its investigation and that it had sent “a clear message that fraudulent certificates, misrepresentation, and incomplete delivery will not be rewarded”.
The SIU also said it will continue to act decisively to protect the integrity of public procurement and restore public trust, and that it will refer any evidence of criminal conduct uncovered during its investigation to the National Prosecuting Authority (NPA) for further action.
“The unit is also authorised to initiate civil proceedings in the High Court or a Special Tribunal to correct any wrongdoing uncovered during its investigation and to recover financial losses suffered by the State, including funds paid for services not rendered,” said the corruption-busting entity.
bongani.hans@inl.co.za