M&G questions lack of action on Heath report

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The Mail & Guardian newspaper is asking why seemingly damning findings about a presidential jet-leasing contract have not been used to strengthen a court case currenty underway. Legal consultant Judge Willem Heath investigated the controversial R820 million presidential jet-leasing contract that former secretary of defence Mpumi Mpofu refused to sign last year and recommended that it be scrapped because he considered it invalid.

But the contract was not cancelled and is now at the centre of a bitter dispute in the North Gauteng High Court in Pretoria, the M&G says. “Heath’s 37-page report appears to validate Mpofu’s concerns, stated before she quit her job in October last year after allegedly facing ‘intolerable pressure’ to sign what she considered an irregular contract to lease two luxury jets for the presidency from the AdoAir Aviation Group, which was chaired by Nigerian businessperson Adegboyega Olulade.

Sources close to Mpofu said she was not consulted on the AdoAir leasing contract and was acting on advice from her own legal team when she doggedly refused to sign the contract. The M&G “was informed that Mpofu was living in fear of her safety while tensions in the defence department escalated. As the accounting officer for the defence department, the contract with AdoAir could not proceed without her signature.”

Instead, AdoAir took the matter to court, claiming that because then-minister of defence and military veterans Lindiwe Sisulu and her department had not proceeded with the awarded tender, it appeared a decision had been taken not to go ahead with the contract and the company was therefore applying for a review of the matter. The defence minister and Armscor opposed the review application while its legal team continued to negotiate with AdoAir for more favourable contract terms.

The M&G says it was informed that Sisulu commissioned Heath to give a legal opinion on the contract after Mpofu quit her post. “What mystifies the few who are aware of the existence of his report is why it was kept internal and not handed to the court so that the department of defence could try to get out of the flawed contract.” Sisulu’s spokesperson, Ndivhuwo Mabaya, said that Sisulu, as defence minister, would not have decided whether the Heath report was to be handed to the court. “She might get advice from Heath and then pass it on to the secretary of defence [Sam Galube], who would decide on procurement matters,” he said.

In his report, Heath alleged numerous irregularities in the AdoAir contract, including:
• A R20-million upfront deposit that was to be paid by the defence department at the start of the five-year contract.
• A number of irregularities in the procurement process, including that AdoAir was not compliant with black economic empowerment policies, no external evaluation had been done to prove the company was in financial good standing and it was a closed tender process that should have been advertised.
• Apart from listing what he alleged were some fraudulent misrepresentations in the contract, Heath was disturbed that no evaluation was done of the two Embraer Lineage 1000 VIP jets offered for lease. His report illustrated that a cash purchase of the two jets would have cost the state about R572-million, whereas the five-year lease on the aircraft had a price tag of R820-million.
• In terms of the tender requirements, AdoAir should have provided proof of the aircraft’s availability, but the company did not even have the aeroplanes at the stage of tendering.