Public Protector probes R671m DWS contract with software giant SAP

File Image

File Image

Published Mar 26, 2018

Share

Johannesburg - The Public Protector is investigating a R671 million ($60

million) government contract with German software firm SAP

, which has admitted misconduct in separate deals

involving friends of ousted president Jacob Zuma.

The Public Protector's office said it had received an anonymous letter

alleging due process was not followed in the award of a contract

to SAP in 2016 to provide IT and support services to the

Department of Water and Sanitation (DWS).

The investigation comes at a time the DWS is under growing

pressure from opposition politicians who blame it for failing to

avert a chronic drought in Cape Town and as parliament prepares

to investigate mismanagement at the department.

Since replacing Zuma in February, President Cyril Ramaphosa

has pledged to crack down on corruption after a string of

scandals. Several investigations into government and private

companies have since moved forward.

"The Public Protector is investigating the SAP licences," a

spokesman for the agency, Oupa Segalwe, said. "The allegation is

that SAP licences for both the department and water boards were

purchased without following due process."

READ: 

The Public Protector has carried out several influential

investigations, including one in 2014 that was instrumental in

making Zuma repay more than R7.8 million ($600 000) of state-funded security

upgrades to his private home.

In 2016, the watchdog revealed details about the undue

influence Zuma's friends, the Guptas, had over the awarding of

state tenders and the role played by global firms.

SAP declined to comment on the agency's inquiry or give

details about the contract but said it was conducting a review

of all its deals with the South African government back to 2010.

"SAP is aware of this contract which forms part of the

broader ongoing SAP South Africa investigation," SAP spokesman

Rajiv Sekhri said. "If we identify any matters of concern we

will address and manage them vigorously and comprehensively."

READ MORE: 

The anonymous letter received by the anti-graft agency also

alleged the contract was unnecessary because existing DWS

licences with SAP covered the same services.

A DWS spokesman said the ministry was not aware of the

Public Protector's investigation and denied any wrongdoing.

"No evidence of corruption exists as the procurement

followed a full process," Sputnik Ratau said.

MINISTRY UNDER FIRE

The SAP contract has already been mentioned by lawmakers

looking into mismanagement at the water department, as well as

in an Auditor-General report last year that concluded the

ministry had been guilty of wasteful and fruitless spending.

Mlungisi Johnson, chair of parliament's Portfolio Committee

on Water and Sanitation, said lawmakers had asked DWS officials

about the SAP contract but received contradictory information.

"We invited them to parliament and gave them an opportunity

to explain themselves clearly. They didn't take it and now they

will face an inquiry," Johnson told Reuters.

He said the committee would meet on Tuesday with the

Auditor-General, Treasury and an investigative unit that reports

to the presidency to finalise the scope of the parliamentary

inquiry into DWS.

ALSO READ: 

The DWS spokesman did not respond in detail to allegations

of mismanagement although he said there were lessons to be

learned from the drought in South Africa, which has been

declared a national disaster.

The Auditor-General said DWS signed a deal with SAP to

provide five years of IT products for 450 million rand and two

years of support services for 221 million rand. The

Auditor-General's report said it believed the cost was "high".

It said 285 million rand had already been paid to SAP.

The German company declined to comment on the

Auditor-General's report or the parliamentary inquiry into the

DWS.

SAP said this month an internal inquiry found it acted

improperly by paying more than $9 million in commissions to

companies controlled by the Gupta family to win contracts with

state power firm Eskom and rail company Transnet.

However, the German company said there was no evidence of

direct payments to South African government officials.

Three Gupta brothers are under investigation over

accusations of corrupt links to Zuma. One of the brothers, Ajay,

was declared a fugitive from justice hours before Zuma was

forced out of office and has left South Africa. 

Reuters

Related Topics: