The High Court in Johannesburg dismissed an application brought by contractors that appealed a decision of the Special Tribunal order, stripping the companies of profits earned from the R40.4 million contracts awarded by the Department of Public Works and Infrastructure (DPWI) to erect the Beit Bridge border fence, as part of the Covid-19 emergency procurement in 2020.
Soon after the razor mesh fence between South Africa and Zimbabwe was erected by Caledon River Properties Pty Ltd and Profteam CC, it started to fall apart, prompting the Special Investigating Unit to investigate the awarding of the contracts.
The two contractors were jointly paid R21.8 million of the R40.4 million in advance by DPWI for the construction of the razor mesh fence.
Following an intensive investigation by the SIU, which uncovered a number of irregularities, including the pre-payment, the DPWI was interdicted, prohibited and restrained by the Special Tribunal from making further payment, pending the conclusion of the civil claim instituted by the SIU.
The R40.4 million contracts were reviewed and set aside by agreement between the parties in March 2022.
The tribunal also ordered the service providers to be divested of the profits earned from the multi-million rand contracts.
The service providers had agreed to the declaration of invalidity of the contracts due to procurement irregularities.
However, they appealed to the full bench of the High Court to challenge the Special Tribunal’s order depriving them of the profits made from the impugned contracts.
The High Court had ordered that:
1. The application is dismissed with costs.
2. The service providers must, within 30 days, file audited statements and debatement of accounts reflecting their respective income and expenditure in the contracts.
3. The SIU and public works department are ordered to appoint, within 30 days thereafter, qualified expert(s) to compile a report as to the reasonableness of the service providers’ expenses and file papers.
4. The service providers are ordered to pay the public works department, within 30 days, profit earned from the contracts as agreed by the experts and made the order of the tribunal.
“The SIU welcomes the order of the High Court, as it enforces the implementation of the Unit’s investigation outcomes and consequence management,” said Kaizer Kganyago, spokesperson for the SIU.