Fin24

DTI annuls R153m Cipro contract

2010-06-17 10:13

Johannesburg - The department of trade and industry has cancelled the controversial R153m contract for a new electronic management system which was ordered by the Companies and Intellectual Properties Registration Office (Cipro).

More than R90m of the contract - which was signed with an unknown empowerment group called ValorIT - has already been paid, even though delivery is three months in arrears, because of "resources limitations within ValorIT".

The cancellation follows a forensic investigation carried out by the Accounting Standards Board, which uncovered serious irregularities in the awarding of the contract.

Though the report was not released, it led among other things to the suspension of Cipro CEO Keith Sendwe and information head Michael Twum-Darko.

Sendwe and Twum-Darko allegedly interfered with the tender process to ensure that the contract would be awarded to ValorIT, even though the offer from the better-known Faritec was only R60m.

ValorIT has already instituted legal proceedings in the Northern Gauteng High Court to confirm the validity of the contract. The department will oppose the application, but has not yet submitted any legal documents.

However, the cancellation raises serious questions about when Cipro will finally be able to cope with its work load.

Over the past year, clients have been finding it increasingly difficult to carry out basic functions like the reservation of names for new businesses because of inadequate information technology infrastructure.

In addition, Cipro will change into a commission with a substantially greater work load when the new Companies Act comes into operation in October.

Another tender process is expected for the outstanding work.

A parliamentary reply by Trade and Industry Minister Rob Davies showed that nearly R94.7m has already been paid to ValorIT. The lion's share of these payments were approved by Twum-Darko before his suspension. The last payment of R1.44m was made on April 29 for among other things project management and "personal leadership training".

 - Sake24.com

Comments
  • Vuli Xundu - 2010-06-17 11:05

    Better means to regulate these tender processes is needed if everyone is to share in the wealth of this country. This is not an isolated incident.

  • like duh! - 2010-06-17 11:30

    Well done Rob Davies, too late! How are you going to get back the paid R90 million? Who is going to be prosecuted? This is the stuff that brings down real governments in other countries. SA just goes and adds more legislation to plug loopholes, rearranges all the furniture, but on the ground there is incompetence and manic greed, and no matter how complex and sophisticated the legislation, until you appoint real people with real track records and proven integrity into positions of responsibility this will keep on happening. It's no longer the old struggle-junkies helping each other and fleecing the state; it's got to the point where it's anybody as long as they're AA-profiled, from any African country, shoehorn them into top posts, and then watch how they scheme to tap the state fiscus. What a bloody charade.

  • boyze - 2010-06-17 11:40

    surely the next tender will be won by a white company. All this shows that the minister doesnt care about the whole country and the CIPRO business he is so selfish.

  • ian - 2010-06-17 11:54

    This is criminal. One is left with little doubt that backhanders were to be paid out. Why else discount a tender from an established concern at a much lower price.

  • Vuli Xundu - 2010-06-17 12:10

    As much as I am apalled at this, I don't think it is fair to generalise about black people's integrity.

  • Redeployed - 2010-06-17 12:23

    Sendwe and Twum-Darko will not be dismissed or proceduted - they will be re-deployed in higher posts at another Gov Institution where they can steal more!!!

  • James Thorpe - 2010-06-17 12:23

    @Vuli Xundu: Sadly, these guys (DTI/Cipro) *are* the regulators... the only regulators left to control this are you and I with our votes. Come twits out of power and vote in a party that has a *chance* of running the country properly.

  • Charlie Chaplin - 2010-06-17 12:51

    @ Vuli- I agree. Government completed inability / unwillingness to act firmly against corruption and gross incompetence unfortunately is creating a perception that they condone impetence, bribery and corruption

  • CPP - 2010-06-17 12:54

    The corruption and miss appropriation of tax payers money will not stop soon. Our goverment is oblivious to the scale of corruption going on out there amongst goverment departments because most of the ministers and their "connections" are part of the large scale corruption going on. It is no wonder that everyone and his dog wants to strike these days as it would appear that although the workers demands seems to be outrages and un affordable they are also now tired of the top officials getting all the money and they end up with nothing. It would appear that the more money you miss appropriate the bigger bonus you get at the end of the year!! Roll on into another Zim just on a much larger scale. We need an almost total melt down and empty shelves with no food or bread before the masses will wake up and realise the goverment is taking us all for a ride - them in luxury cars and the rest of us on push bikes!!

  • gcr - 2010-06-17 12:59

    The editor/s of Fin24 seems to be somewhat confused in the application of their own disclaimer. They publish my comments but then see fit at a later stage to withdrawn my comments even though they say they have the right to vet and check posts. Pretty inane censorship principles and rules being applied

  • Nedib - 2010-06-17 15:03

    See what happens when you lose contracts like this...Shareholders are referred to the announcement dated 11 May 2010 advising shareholders that Faritec Holdings (JSE:FRT), in its capacity as a creditor of Faritec Enterprise Solutions (Pty) Ltd ("Faritec Enterprise Solutions") had filed for the liquidation of Faritec Enterprise Solutions, Faritec's wholly owned operating subsidiary.

  • andre - 2010-06-17 15:22

    Just another bunch of "prawns" trying too steal every cent they can lay their paws on. They are getting so cocky that in this case the contract was awarded to an incompetent bunch for 250% of the value of the competent well - known company.. They don't seem to get away with it and every time the race card gets used and they blame it on white capitalists and apartheid.

  • Lukas - 2010-06-17 19:18

    @Nedib. Absolutely, Faritec was/is a decent truly black empowered company that is now in the process of liquidation. This contract may well have been their saviour and would have saved many jobs and people's investments in the company.

  • just askin - 2010-07-20 15:07

    what has been done to recover the R90million paid in advance on the contract and will it be recovered as the talk of insolvency is a huge concern

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