Parliament: Treasury’s chief procurement officer ducks and dives about SAA
Acting Chief Procurement Officer Willie Mathebula proclaimed his office’s automated supplier register as “quite an achievement”, but was evasive regarding the review of contracts at SAA. The official list of reviews of contracts worth more than R10-million presented to finance committee MPs included troubled state-owned entities Eskom and Prasa alongside the SABC. SAA slipped in during questions by Parliament’s finance committee. That’s not unsurprising as the national airline received R5.2-billion in government bailouts in the past three months. By MARIANNE MERTEN.
Maybe it was a slip of the tongue, that comment about an SAA contract review, but DA MP Alf Lees followed up. It then emerged that it wasn’t actually the Office of the Chief Procurement Officer (OCPO) that was looking into those contracts, but the Office of the Accountant-General in the National Treasury. That office’s responsibilities, according to the National Treasury website, was “to promote and enforce transparency and effective management in respect of revenue expenditure, assets and liabilities of institutions in all three spheres of government”.
“I do know there are discussions within Treasury,” said Acting Chief Procurement Officer Willie Mathebula, adding to a later follow-up: “I’ve tried to answer to the best of my ability… I can’t say more.” When Lees repeated his request: “All I want to know: Are there any SAA contracts (under review)?”, he remained schtumm.
“Incredible!” exploded the usually quiet-spoken, even-keeled opposition MP. But Mathebula received protection from acting finance committee chairperson Thandi Tobias: “He says he’s answered the question. We’ll come back (to it).”
Seven weeks ago Parliament’s public spending watchdog, the Standing Committee on Public Accounts (Scopa), took a dim view of how SAA runs its business – using letters of appointment, not signed contracts, and evergreen contracts, a hangover of apartheid days when contracts with suppliers were simply automatically renewed on expiry.
And Scopa was also briefed on National Treasury’s review of all Eskom coal contracts, including those with the Gupta-linked Tegeta, and found the power utility had contravened its own procurement processes. However, because that investigation was subsequently withdrawn, those coal contracts remained listed on the OCPO contract reviews. When asked about the status of the Eskom coal supply deals, Mathebula replied: “There is a process to appoint a forensic audit…”
A little more detail was given beyond the fact that 260 contracts at Prasa are under review by 13 independent audit consultants, including KPMG, at an estimated cost of R24.17-million to government.
It was a bizarre two-hour interaction in Parliament’s finance committee that raised more questions that were answered. And not only over the claimed achievement of establishing an automated supplier database. The central tender database that publishes all government tenders and the central database of registered suppliers were established in 2015, some two years after the OCPO was established in 2013.
In the 2016/17 financial year there were an eyebrow-raising 793 applications for deviations, effectively requests to stray from procurement procedures by departments, SOEs and other state entities. Of those, 450 were approved and 198 given the go-ahead with conditions at a cost to government of R37.67-billion. Eskom topped the list with R31.3-billion in deviations, the South African Revenue Service (SARS) with R1.2-billion, followed by Rural Development Department at R685.9-billion and South African Social Security Agency (Sassa) with R404.7-million.
In addition, another R42.2-billion came from the national purse due to expansions and variations of contracts signed after the procurement process, with Eskom again leading the pack with R33.3-billion, followed by the Health Department (R6.2-billion) and the Airports Company of South Africa (ACSA) at R868.7-million.
But Mathebula told MPs he didn’t know how the decisions on deviations were made. “During my first month in office, I can’t say what justifies requests for deviations and what is not justifiable,” he said, adding later: “I can’t say what constitutes approval… not approval. That’s why I’m suggestion the framework.”
After schmoozing MPs with talk of his office “developing a framework on deviations”, Mathebula backtracked in response to MPs’ questions as to how his office could have dealt with these requests if there were no guidelines. Yes, there was a National Treasury instruction on how to deal with deviations, he said: “That’s the framework we have, but it’s something we need to strengthen… That framework is not detailed enough. When we get these applications, what do we look for (to make a decision to approve or not)?”
Yet in 2015 National Treasury published its “Public Sector Supply Chain Management Review”, outlining not only the role of the OCPO but also the public sector procurement cycle, with special attention to infrastructure delivery and maintenance. The National Treasury website contains information about the strategic procurement framework “to support a more strategic and efficient approach for procurement of goods and services. Under this framework, procuring goods and services now has an emphasis on complexity and risk with each procurement requiring forward planning”, according to one document.
And in announcing the resignation of the first ever chief procurement officer, Kenneth Brown, in December 2016, the National Treasury said, “The OCPO is now fully established with capability in policy and legislative formulation, governance monitoring and compliance, SCM (supply chain management) automation, centralised procurement; strategic procurement; and stakeholder management.”
While Mathebula on Wednesday talked of strengthening the office, the OCPO monitoring and compliance section appears to be doing its job. According to the Sunday Times, officials inspected various Eskom offices following a request for just over 9,000 chairs at a cost of around R2,600 each, or R24-million, in addition to the existing R72-million contract. Only about 500 chairs were actually needed.
Mathebula also talked of the need to “improve relations with other departments. It is very important to work together… so we don’t appear we are over imposing on any other department”.
And herein lies perhaps another slip of the tongue, a rather unfortunate one given public criticism of changes, including Mathebula’s own appointment, at National Treasury as being part of a State Capture project since the appointment of Finance Minister Malusi Gigaba in the controversial March midnight reshuffle.
Those changes, including a review of the OCPO duties, were at the heart of Sunday’s City Press report. But this was dismissed as “completely inaccurate” by the acting chief procurement officer: “I have never met the minister, I have never met the deputy minister as an individual. But I have met the minister as a team before I started acting.”
Although Mathebula was emphatic about the article – “I dispute the content of that article with the contempt it deserves,” he told MPs – to date this does not seem to have led to any of the usual steps to ensure correction, such as lodging a complaint with the Press Ombudsman, firing off a lawyer’s letter, getting the right to reply in the newspaper, an official media statement to refute a report and the like.
When asked whether it was not important to correct what he said were inaccuracies in the public domain, Mathebula told Daily Maverick he personally would not take action. “I’m not taking steps personally. The National Treasury may want to.”
When asked whether as a senior public servant heading a key office in the National Treasury it was not important to swiftly correct what he said were inaccuracies, Mathebula cited processes and protocols. “There are processes in the National Treasury that must be followed… There’s a communication unit,” he said, adding: “The director-general is aware.”
It could not be independently established what steps, if any, may have been taken.
The invocation of protocol and processes in the current climate perhaps should not be a surprise, and nor should be the curious appearance before Parliament’s finance committee.
The OCPO’s written presentation to MPs said the office “has succeeded in creating the necessary shock in the system, fighting corruption and abuse of the SCM system”. In response to MPs’ questions Mathebula appeared to have a different take: “The question: do we have capacity to fight corruption? I agree with you we don’t have. We need to work very closely with the law enforcement agencies.”
Backpedalling may just be the new normal. DM
Photo: Treasury’s new acting chief procurement officer Willie Mathebula. Picture: Gaye Davis/EWN