Finance Minister Pravin Gordhan has instructed government departments to stop doing business with 120 blacklisted companies for up to 10 years, the Business Report newspaper says today. More than half of the companies and individuals, which are listed on the “database of restricted suppliers” on the National Treasury’s website, have connections to Limpopo province.
Treasury spokesman Jabulani Sikhakhane said the blacklisting applied “for a period not exceeding 10 years”. It was at the discretion of the accounting officer or a government authority to extend the restriction “to any other enterprise or any partner, manager, director or other person who wholly or party exercises or exercised or may exercise control over the enterprise of the first mentioned person”.
Asked if any politicians were involved, Sikhakhane said that a check would have to be done with the Companies and Intellectual Property Commission, which lists directors, to establish connections “to any specific person”, the paper said. Details as to state officials who were involved in business with the government were not yet available but this would not become the responsibility of the Treasury, said Sikhakhane. The Public Service Commission was seen to be a more appropriate vehicle for this task.
The blacklist contains a host of restricted suppliers that have done deals with the Limpopo Department of Local Government and Housing. Gordhan told parliamentarians this week that the blacklist would be put on the website. The Treasury on Tuesday issued “an instruction note” to deal with fraud and corruption in the public procurement system “and (to) give effect to the commitments made in the (February) Budget speech”.
The website item provides either the registration number of the offending firm or the ID number of the person associated with a procurement.
The Limpopo Information Technology supplier was described as blacklisted for not obtaining permission to conduct business with the state, in this case the Agriculture Department in Limpopo.
Masego Lahili, a Business Unity SA (BUSA) spokesman, welcomed the announcement on tighter regulations. “It is an important step and will certainly assist in eradicating the fraud and corruption associated with government contracts.” The key to success, he said, was to ensure effective implementation and enforcement of the regulations. BUSA also welcomed transparency provisions of Gordhan’s “note”, including that successful bids for government contracts must be published.
In February Gordhan said 65 people had been arrested in connection with 53 cases linked to procurement irregularities involving R3 billion – part of the broader probe into almost R25 billion in dodgy state contracts. By the end of January, the SA Revenue Service identified 13 000 vendors who had won state contracts, but owed taxes of over R1 billion, and it was investigating nine cases of tender fraud to the tune of R1.7 billion.