KZN government releases ownership details of R2.1bn in COVID-19 contracts

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The KwaZulu-Natal government paid R17m of its total R2.1bn expenditure on COVID-19 to companies for which it has no details, Premier Sihle Zikalala is quoted in a Polity report as saying. This emerged as the provincial government released its report on the owners and directors it paid around R2.1bn to during the COVID-19 pandemic up to 31 August.

It also does not yet have the ownership details of companies which did business with municipalities because of different IT systems, but said this is a work in progress.

Zikalala said the point of releasing the report was not to be judgemental, but to get an understanding of how the money was spent and who benefitted, particularly in light of transformation goals.

Four companies which received R3,878,720 in total were also found to have not been on its database. One, called Bellanova, received R3.8m, Contichem Stanger got R2,520, a Dr Mohamed R720 and Dis-Chem R480. Zikalala said these would be further investigated and speculated that the Dis-Chem payment, for example, may have been a petty cash expense. The media was also paid during this time, with the SABC, Independent Media, and Ilanga among them.

The report says a question about a company called PLZ projects with “Zulu princess Zinhle” listed as the owner appeared to ruffle feathers at the press conference, and the briefing was quickly wrapped up.

An analysis of recipients of contracts during COVID-19 also gave insight into the races and genders of people who got the work:- Black R810m (38.43%); Indian R622m (29.5%); companies owned by others (subsidiaries) R568m (26%); White R37.9m (1.8%); mixed ownership R31.3m (1.49%);no details R17m (0.84%); Coloured R10m (0.51%); and Asian 9.71m (0.46%)

Companies in which women held a stake of 50% or more scored contracts to the value of R687,411,880, representing 33% of the total spend. Businesses in which youth owned 50% or more of the company were awarded deals to the value of R310,786,509, representing 15% of the total spend.

Four companies – named as Aramiya (R82,380), Khanyisile Agency (R1.7m), and Ntandoyenkosi Holdings (R67,448) – registered at the end of March, as the first cases of COVID-19 and the need for essential items became evident. When pressed for further comment on some of the contracts awarded, the press conference was ended.

Zikalala reiterated that the State Security Agency (SSA) and the South African Revenue Service (SARS) would assist with the separate matter of lifestyle audits of government officials.

 

The 16-page report – which included ID numbers – was a “follow-up” to the KZN COVID-19 Procurement Disclosure Report released on 13 August, Zikalala is quoted in Daily Maverick as saying. The province had spent R2,108,124,944.28 on its COVID-19 response and management by 28 August, Zikalala said.

The premier did not mention any companies being investigated by his office, or provincial treasury, or any provincial departments, into possible irregularities into the spend – which included supplying  personal protective equipment (PPE) and doing construction works, such as hospital upgrades.

However, Daily Maverick said the special investigating unit (SIU) has previously confirmed with that it is investigating provincial education department PPE contracts valued at R492.6m. It is also probing the procurement of blankets in the KZN department of social development (DSD) valued at R22.4m, and another 18 contracts in DSD for the procurement of PPE, valued at R21.2m.

Zikalala did not mention these.

The report says both Zikalala and KZN finance MEC Ravi Pillay played it cautiously, saying they did not want to “pre-empt” or make accusations against those listed. Pillay called the report “part of a first stage of a transparency exercise”.

Zikalala said his office was thus far unable to provide the same detail for municipalities as it had for provincial contracts. This was because “the reporting format and the IT systems applicable are different”. It was a work in progress, he added.

KZN’s municipalities incurred R925,271,000 in COVID-19 expenditure.

Zikalala said if anything was found to be “untoward” in the awarding of any of the contracts, the province would “not hesitate to act decisively”.

 

Full Polity report

 

Full Daily Maverick report

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