Tuesday, March 15, 2011

ECape investigating R800m tender scam

ECape investigating R800m tender scam
Mar 15 2011 18:46


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Johannesburg - Over 20 Eastern Cape health department officials are being investigated for R800m tender fraud, a spokesperson said on Tuesday.

The group of senior and junior officials were still being paid, after they were suspended in February 2010, Sizwe Kupelo told Sapa.

"About 10 companies and 20 officials are implicated in the scam."

The department, with the help of auditors from PricewaterhouseCoopers uncovered the crimes early in 2010.

"These companies would tender for different services using different names, but sharing one address, phone and fax number."

The alleged practice had been continuing for two years. The department had handed the information to the police for a criminal investigation.


  1. Brian Hayward haywardb@avusa.co.za
    WATCHDOG lobby groups have cautiously welcomed the Eastern Cape Health Department‘s handing over to police of a forensic report which details how fraud and corruption by officials and service providers have cost it at least R45-million.
    Department spokesman Sizwe Kupelo said yesterday a forensic investigation by PricewaterhouseCoopers had revealed the fraud and corruption were related to contracts and tenders and implicated as many as 35 companies.
    The investigation started last year and involved activities spanning the last three financial years, he said.
    “The investigation revealed firstly that there was fraud and corruption totalling R13-million for an air ambulance contract. We also have an amount of R18-million related to tender procurement, where at least eight officials would allegedly award tenders to their own companies.”
    An amount of R14-million meant for the maintenance of medical facilities and new building activities was also “lost”. “All cases have been referred to the police and the officials involved have either been suspended or resigned,” Kupelo said.
    Yesterday, The Herald reported how Health MEC Sicelo Gqobana had also ordered a probe into the Port Elizabeth medical depot responsible for the distribution of drugs to the province‘s health facilities.
    Advocacy groups yesterday cautiously welcomed the move, but called for speedy prosecutions.
    “In too many cases officials escape further investigation and prosecution by resigning. I believe nothing sets a better example for corrupt officials than a successful prosecution,” said Derek Luyt, media and advocacy head of the Rhodes University Public Service Accountability Monitor (PSAM).
    Health researcher Daygan Eagar, of advocacy group Section27, said the department had exhibited a “definite shift in the way (it) is dealing with ... fraud and corruption”.
    “Little over two years ago we would have heard virtually nothing about what was happening with these cases and those involved would have got off lightly, if the cases were pursued at all,” Eagar said.
    But things were far from rosy. “If the department‘s financial management system was functioning properly and in accordance with the Public Finance Management Act there would be far fewer instances of fraud and corruption and when they did occur they would be resolved long before the department suffered significant financial loss.”
    Additional reporting by Sapa

  2. There is only one drawback here.

    "Police corruption."

    If they cannot account for 20,000 firearms lost & stolen since 2004, then how will they successfully prosecuted these felons?

    The Eastern Cape is an ANC hotbed for corruption!