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Lucrative Lindela contract under fire

Published Jun 24, 2007

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By Janine Stephen and Angela Quintal

The company that negotiated an extremely lucrative contract to run the Lindela Repatriation Centre near Krugersdorp is part of the Bosasa group of companies - which stands accused of receiving special treatment from the government in the past.

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And in a surprise twist, Home Affairs Minister Nosiviwe Mapisa Nqakula's communications adviser, Stephen Laufer, is also a Bosasa spokesperson.

The Lindela contract, awarded to a 100 percent Bosasa owned subsidiary, Leading Prospect Trading, has attracted the wrath of the Auditor-General and Parliament's standing committee on public accounts (Scopa).

It is but one of the many contracts the department hopes to renegotiate.

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Bosasa has previously come under scrutiny in relation to its correctional services contracts.

Bosasa chief executive Gavin Watson had a long-standing relationship with the prisons commissioner at the time, Linda Mti, although Mti has always denied any impropriety.

Scopa chairperson and PAC MP, Themba Godi, told Weekend Argus week that his committee was "horrified" by the Lindela contract, "which amounts to nothing more than a rip-off of the state".

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The Lindela service provider "displayed tendencies characteristic of people who milk the state to advance their commercial interests", he said.

Godi also felt Laufer's dual role could be a conflict of interest and the relationship could not be sustained, most of all because Bosasa was being accused of "ripping off that department".

Mapisa-Nqakula, who is in the midst of implementing a turn-around strategy for her dysfunctional department, said she was unaware of her adviser's other job as a Bosasa spokesperson.

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She was due to meet Laufer to establish the facts and decide on a course of action.

Laufer said in an interview after Weekend Argus discovered his dual role that he had declared other clients of his communications advisory company to Home Affairs.

He also said he had never been involved in any aspect of the relationship between the department and Lindela as Home Affairs communications adviser.

He had recused himself in writing from any further possible dealings with Lindela, Laufer said.

But the fact that he had commented on behalf of Bosasa on a matter relating to Lindela appeared to be a "serious conflict of interest and is totally unethical", said Mapisa-Nqakula.

While Laufer had not advised her in relation to Lindela in the past week, she may well have approached him for advice in the next day or two given that the contract had received widespread coverage, she said, adding: "I'm not happy with what he has done."

Although she did not know whether Bosasa had any other contracts with the department, the Lindela one - though disadvantageous to Home Affairs - appeared to be above board.

"My understanding from the CFO and the DG is that it was awarded on merit," she said.

Nor was she aware of any other potential for conflict of interest.

However, she acknowledged that the Lindela contract was one she hoped to renegotiate as part of the department's turn-around strategy.

Godi said it was worrying that there were a number of instances across departments in which contracts had been negotiated in a manner that was "glaringly disadvantageous" to the government.

Godi referred to the uncomfortably close relationships between some businesses and the government, noting that some correctional services officials had resigned to assume positions in the same company they had been in negotiations with.

Earlier last week, new Home Affairs director-general Mavuso Msimang told Scopa the 10-year contract with Leading Prospect Trading Pty Ltd was not a good one.

Home Affairs chief financial officer Pat Nkambule was grilled about why such a long-term contract had been awarded - and why the department had been locked into paying a fixed monthly fee based on an unnaturally high number of detainees.

"It's sad if it is South Africans who act in this manner, and more of a tragedy if some who were involved in the liberation struggle display no conscience," Godi said.

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