Corruption Watch has reported before on the questionable leasing deal entered into by the Independent Electoral Commission (IEC) – a deal that saw the IEC in 2009 signing a contract to rent its new head office building in Centurion, at a cost of R320-million over 10 years.
In October 2011 the United Democratic Movement's Bantu Holomisa filed a complaint about the lease with public protector Thuli Madonsela. She investigated the deal, which also involved an undeclared conflict of interest by IEC chairperson Pansy Tlakula, and in August 2013 her report, titled Inappropriate Moves, was published. It revealed that the process of securing the lease was carried out irregularly, and violated procurement rules set out by treasury. Because regulations were not followed, the treasury commissioned PricewaterhouseCoopers (PwC) to carry out a forensic investigation into the deal – this was concluded in December 2013.
In February 2014 Corruption Watch sought to access, through PAIA, a copy of PwC’s forensic report, as well as a copy of the original lease agreement. The IEC responded that it was not in possession of the report, as it was commissioned by the treasury.
The forensic report has now been made available on the IEC’s website and corroborates much of what Madonsela found in her own report.
The PwC found that the procurement process was deeply flawed, and that there were a number of errors that resulted in the winning bidder “Abland being favoured at the expense of other bidders and in Abland being favoured at the expense of the Electoral Commission”.
Furthermore, notes the report, “some of the expenditure could have been avoided had reasonable care been taken”. The report lists the procedural flaws found by PwC, including the fact that no tender briefing was held, neither was a detailed tender specification document issued, and bid evaluation criteria were changed – to the benefit of Abland – after the shortlist had been drawn up. Because of this, the IEC is renting about 50% more space than it needs, at a rate that is not considered to be fair market rental. Over the 10-year lease the body will unnecessarily pay around R110-million more in rental fees, as well as an extra R20.8-million because of high operating costs, says the PwC report.
It concludes that Tlakula and her subordinates – Norman du Plessis, the deputy chief electoral officer corporate services and Stephen Langtry, the manager in the office of the CEO – should each be “held responsible for the roles they played that resulted in a procurement process being followed that was not fair, equitable, transparent, competitive or cost effective”.