Finance Minister Pravin Gordhan’s plans to fight corruption in state procurement and review all property leases was welcomed by political parties and labour, following the unveiling of South Africa’s R1-trillion budget on Wednesday 22 February 2012.
Corruption in procurement and questionable leasing deals are costing government billions annually.
Just the two police headquarter leases, for which police commissioner Bheki Cele was suspended, were worth R1.6-billion.
Parastatal the Post Office was also forced to launch an internal probe into its move to new headquarters in Centurion, which has since revealed R19-million in “fruitless and wasteful” expenditure, and R425-million in “irregular expenditure”, according to the board.
Questions have also been raised about procurement processes in cash-strapped Limpopo, Gauteng and Free State in particular. Both Treasury and Auditor-General (AG) Terence Nombembe have, for some time, voiced concerns about corruption in supply-chain management and weak accountability systems.
Highlighting how seriously government is taking corruption and fraud, and its impact on service delivery and job creation, Gordhan told parliament on Wednesday that Treasury would be playing a key role in policing the tender process both from a fraud and corruption level, and ensuring that government “gets value for money”.
Treasury will also draft a price-referencing system to make it easier to detect any deviation from acceptable price ranges, which could indicate the inclusion of a bribe.
A chief procurement officer will be appointed to monitor procurement across government.
Following up on a promise by President Jacob Zuma in his recent State of the Nation address that there would be strict vetting of all procurement officers, Gordhan said his department would conduct a review of the competencies and capabilities required for the position.
Another key announcement was that the tax clearance system would be strengthened to ensure that those who had defrauded the state would not be able to do business with government in the future.
The review of government’s 3 000 government lease agreements is expected to take a year.
Public Works Minister Thulas Nxesi, who replaced Gwen Mahlangu-Nkabinde following the police headquarters lease investigation, recently told parliament’s portfolio committee on public works that the lease deals had highlighted the lack of capacity within his department.
He asked Treasury to assist with procurement training and oversight.
The Department of Public Works received a disclaimer from the AG for the 2010/11 financial year because the AG could not form an opinion on the state of the department’s finances.
Union federation Fedusa, while saying it was cautiously optimistic about some aspects of the budget, welcomed the appointment of a chief procurement officer as a “step in the right direction”.
The Inkatha Freedom Party, which expressed concern about the budget’s “insufficient emphasis on economic growth”, welcomed the move to clamp down on corruption in procurement and leasing.