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."
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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."
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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.
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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.