POLITICS

Gordhan Reveals The Extent Of The War On 'Rentseekers'

National Treasury has launched a full-scale assault on spending at Prasa, SAA, Eskom, Transnet and the SABC -- all parastatals with crippling issues.

30/11/2016 16:34 SAST | Updated 01/12/2016 12:57 SAST
Siphiwe Sibeko / Reuters

The full extent of the war between National Treasury and so-called "rentseekers" has been revealed to Parliament by Minister of Finance Pravin Gordhan.

Treasury has launched full inquiries into tenders of more than R10 million awarded by five parastatals, all who have over the last years emerged as targets for exploitation and private gain. "Rentseekers" refers to individuals and groups who abuse access to state resources and assets for private and narrow ends.

Treasury has launched full inquiries into tenders of more than R10 million awarded by five parastatals, all who have over the last years emerged as targets for exploitation and private gain.

According to a written answer to a question from David Maynier, Democratic Alliance MP and spokesperson on finance, Treasury has launched forensic audits at the Passenger Rail Agency of South Africa (Prasa), Eskom, the South African Broadcasting Corporation (SABC), Transnet and South African Airways (SAA).

All five parastatals have been embroiled in various scandals of the last few years, becoming the site of the larger struggle around apparent attempts to "capture" Treasury and the latter's efforts to clamp down on corruption and waste.

Gordhan also reveals that his auditors and investigators are not getting any assistance from the SABC, Transnet, the department of public enterprises, or SAA, who have not submitted the required documents as requested by Treasury. The full reviews have subsequently not commenced and none of the five investigations have been finalised.

Gordhan also reveals that his auditors and investigators are not getting any assistance from the SABC, Transnet, the department of public enterprises, or SAA.

It seems from Gordhan's answer that Dudu Myeni, SAA chairperson, is the biggest impediment to the commencement of the investigation into the carrier. He says Treasury is waiting for Myeni and SAA's board to grant permission for auditors and investigators to start working.

The focus at Eskom is the awarding of coal and diesel contracts, which will presumably include the controversial agreement Brian Molefe's executive entered into with the Gupta-owned Optimum Coal Mine, which provides coal to Eskom's Arnot Power Station. Molefe last month resigned as CEO of Eskom after he was implicated in improper dealings with the Guptas. According to an investigation by the public protector, Molefe had extensive contact with Ajay Gupta and his associates around the time that Eskom awarded the contract to Optimum.

The focus at Eskom is the awarding of coal and diesel contracts, which will presumably include the controversial agreement Brian Molefe's executive entered into with the Gupta-owned Optimum Coal Mine.

Another Gupta associate's company, Trillian, is also the focus of Treasury's investigation into contracts awarded by Transnet. Gordhan says in the written answer the scope includes the contracts awarded to Trillian Capital, Regiments Capital and McKinsey Consulting. These contracts entailed the provision of advisory services to Transnet.

Prasa has also been under fire since its CEO, Lucky Montana, resigned after billions of rands were spent acquiring trains that are unsuitable for South African conditions. The public protector found in a subsequent investigation — the report titled "Derailed" — that Montana should be disciplined because of tender irregularities and maladministration. The state-owned enterprise's shambles is detailed in a report, leaked to The Huffington Post, in which Prasa admits it is facing collapse if numerous structural fissures aren't repaired.

The state-owned enterprise's shambles is detailed in a report, leaked to The Huffington Post, in which Prasa admits it's facing collapse if numerous structural fissures aren't repaired.

"All the reviews are conducted by [Treasury] officials. Forensic audits into Prasa contracts above R10 million from 2012 to 2015 are conducted by forensic audit firms. Thirteen forensic firms were appointed (by [Treasury]), each at fixed amounts of R1,8 million, according to the Auditor-General's rates," Gordhan says.


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