Cipro at a loss to explain IT tender

2010-05-18 15:06

Cape Town - The troubled Companies and Intellectual Property Registration Office (Cipro) was hard-pressed to tell MPs on Tuesday why it gave a major tender and advance payments of millions to a three-month-old company with no track record.

Cipro chief financial officer Pieter van Vuuren told parliament's public accounts committee Scopa it was not clear how successful bidder Valor IT obtained additional information that gave it a firm advantage over other companies.

"It is something we hoped would be clarified through the investigation," he told MPs.

Cipro's decision to award a R153m contract to two-man outfit Valor IT to develop a content management system is being probed by the department of trade and industry and several law enforcement agencies.

Auditor general Terence Nombembe found that Cipro failed to follow the proper procurement process, did not take into account the financial sustainability of the company and appeared to have furnished it with confidential business information not given to other bidders.

Officials from the AG's office told Scopa the two unsuccessful bidders complained that they were not given the same information, which was contained in an internal document.

Cipro failed to explain how this happened, they said.

Officials from the State Information Technology Agency (Sita) conceded that Valor IT was registered to do business with government, despite the fact that it had not submitted company results for the required two years.

Forensic investigation opens can of worms

"We didn't go into that. The instruction was more based on technology, BEE and price," said Velaphi Zikalala, Sita's general manager for strategic sourcing.

He was rebuked by Scopa chairperson Themba Godi who said Sita had failed to apply an actual requirement, treating it merely as an optional extra.

Pressed by MPs, Van Vuuren conceded that despite Cipro being in a good position to perform this background check itself, it did not do so.

"Cipro didn't do it. We didn't check whether it had submitted annual returns." Scopa members told Van Vuuren they were astounded that Cipro chose to pay Valor IT R56m in advance to develop software that had still not been put into use, and was now paying the licence fees for the unused material.

Acting CEO Lungile Dukwana said this was done because the entity was told that "without payment, development of the electronic content system would not start".

Valor IT's contract was not suspended pending the outcome of the departmental investigation, which Trade and Industry Minister Rob Davies said had cost R1m so far and had confirmed that fraud and corruption had taken place.

"It has been one million well spent," he said.  "A system that is supposed to deal with white-collar crime is now the subject of an investigation; it is a huge problem." Davies also questioned the handover of R56m in "record time" and said the forensic investigation had disclosed a host of problems.

He had earlier pledged to announce steps to address the transgressions on Tuesday, but said investigators had requested until the end of the month to complete their work.

Cipro CEO Keith Sendwe had been suspended as part of the probe into tender-rigging.

-  Sapa


  • goose - 2010-05-18 15:19

    Yet another tenderpreneur! Wow, we seem to be churning these out in numbers lately..... Another proud South African "achievement"

  • GT - 2010-05-18 15:19

    "at a loss" - Rubbish. Is the word CORRUPTION so hard get out of those lips?

  • slk - 2010-05-18 15:20

    eISH...LOSS FOR WORDS implies they have run out of lies

  • Jean - 2010-05-18 15:20

    Maybe CIPRO cannot say why they did it but I can and so can any idiot on the street. No private company will survive with such idiots and irresponsible people in charge, but our great ANC gov think they can. I wonder how many rich boys are now walking the streets thanks to CIPRO. How disgusting and it is our money they splash out like that.

  • jeremy - 2010-05-18 15:24

    It's hard to avoid jumping to the conclusion that Valor is run by someone related to someone in Cipro, someone's wife perhaps? I've no doubt this will come out pretty soon. It's about time a bit less attention was paid to BEE - and a bit more to performance and delivery.

  • tommy - 2010-05-18 15:28

    Two words come to mind in this regard Hau! Angaas!

  • Que - 2010-05-18 15:32

    This is just brilliant. At least CIPRO has just created another two millionaires. You can't blame them of not distributing the wealth. Ishould start a company too and in a couple of months I'll be rich man ooooooh I can't wait.

  • Clinton - 2010-05-18 15:34

    Can you say "Nepotism" Can you say "Cronies" Can you say "Irregularities" Can you say "Tenderpreneur" Can you say "Corruption"

  • Marc - 2010-05-18 15:39

    153m for a content-management system! Joomla, Drupal etc etc are free, and they want to re-write the wheel? Dont get it at all...

  • Freaky Frikkie - 2010-05-18 15:40

    Oh my goodness, corruption, in a state run entity. Shock, horror. I am so surprised. NOT!!!!!!!

  • James Hammell - 2010-05-18 15:42

    Par for the course for SA. I've been involved in tender processes before and the amount of backhanding and corrupt deals boggles the brain. No surprise here I'm afraid. Oh, and nothing will actually come of this...

  • bwere - 2010-05-18 15:43


  • Deon - 2010-05-18 15:43

    We implore our clients to pay the duty so that their companies won't be deregistered due to non-payment. What are we to tell them now? Why take these fools seriously! Just another corrupt state department. Sies!

  • JJ - 2010-05-18 15:44

    Soooo??? What's new?? It's even got a name you know. Toot Toot Make way for the?? GRAVY TRAIN!!!. Come on people you are getting behind schedule. This Country can do with a LOT more plundering and looting!! Toot Toot!!! And remember, Most important, you are only a criminal if you get caught. What a nice Rainbow Nation we created.

  • AD - 2010-05-18 15:46

    Yet another example - anything run by this government is a mess!

  • Hector - 2010-05-18 15:47

    CIPRO must be congratulated for keeping up the proud tradition the ANC has worked so hard to instill in all of us over the past 16 years. Corruption does pay!!! Just look at how many multi millionaires with 2 brain cells have been created in 10 years

  • Jan Rabie - 2010-05-18 15:49

    Paris has the Eiffel tower, New York the Statue of Liberty, Moscow the Red Square and only thing SA is famous for is corruption and bribery. What a disgrace!

  • joel - 2010-05-18 15:50

    that is the kind of state power abuse that vavi is crying about

  • - 2010-05-18 15:50

    ANC curruption. bunch of corrupt morons.

  • Julius - 2010-05-18 15:50

    Can I get a piece of this action? You Baas-Ted!

  • ANC Kickback - 2010-05-18 15:50

    Viva ANC it's called KICK-BACKS and it makes ANC people rich, and its all TAX-FREE viva ANC VIVA

  • Linds - 2010-05-18 15:52

    Suspended CIO (Dr Michael Twum-Darko) has a lot of explaination to do. If I were him I'd go back to Ghana.

  • as - 2010-05-18 15:57

    Would it ever stopp, coruption in government?

  • sheez - 2010-05-18 16:01

    Give me a R153m contract and I'll devolop not one but a hundred content mannagement systems! haha

  • Wim Randburg - 2010-05-18 16:01

    To JEREMY - NOTHING will come from this, for the simple reason that the R53million paid out did not go to the TWO IT guys alone but also some high up CIPRO thieves. It will be swept under the ANC carpet.

  • BART - 2010-05-18 16:02

    Simple black brothers on the take and looking after one another. It has cost CIPRO R1 million but how much has it cost the economy and how many jobs have been lost? That is the true extent of this fraud.

  • JJ - 2010-05-18 16:04

    "VALOR it is content with the progress made on their projects, in particular the CIPRO Project that been so much under controversy." Taken off the Valor it website... surely with R153M they could have at least hired a PR consultant who can write sense...

  • Mc - 2010-05-18 16:05

    I'm white and I'll develop a content management system for 25% of that price and I'm willing to pay 5% of that to bribes!

  • Bakgat - 2010-05-18 16:05

    Why are you all surprised. This is SA where cronyism leads to incompetent and corrupt-to-the-core cadres working in parastatals and govt institutions. Did you really expect anything different?? They will line their pockets and run this beautiful country into the ground.

  • Themba - 2010-05-18 16:07

    Can you say; C.O.R.R.U.P.T.I.O.N? Can you say; Yet another totally incompetent BEE enterprise; Can you say; ANC = BANANA-republic!!! @ The rate the NPA are trying break up the very units that investigate these crimes, will we ever see justice??? Can you say, NPA = Protecting corrupt TOP officials? Will you at least admit there is something seriously wrong?

  • Stick to the Point - 2010-05-18 16:10

    Now read the comments you have made. Can you distinguish the race of the person that made it. If so then you know why certain individuals are convinced that racists are still amoungts us. This happens all over the world guys. America was riddled with this last year, yet be rather blame ANC and Malema. The were some that made valid comments, congrats

  • wtf - 2010-05-18 16:13

    WTF!!! What does this cms do make people fly??? How the hell do you pay 153M for a Content management system?? I just created one for may client or R20 000, and it took me 7 days. What the hell is up with this country and corruption???

  • just askin - 2010-05-18 16:14

    this is nothing try looking at Joburgs billing system where nothing works Tender was for only 200million and has been overspent by 5 TIMES the original tender price or the 400million on another project which is completely useless and will now have 150million spent on trying to get the thing to work. a tender now appears to be a licence to steal!

  • Phillip - 2010-05-18 16:16

    Observation: Valor IT use Joomla (an open source CMS) on their own company website.

  • Musa - 2010-05-18 16:16

    I'm sure they could have downloaded Joomla/Drupal/DNN and had a CMS for R150 000. Why waste million for a CMS... Corruption is everywhere!!

  • vicky - 2010-05-18 16:19

    Have a look at this article that was published in June 2009 already. Mr Molele's comment at the end is a bit baffling. I thought the article was purely informative, not biased or accusing at all. ME THINKS HE DOTH PROTEST TOO MUCH!!! Cipro website seems to have crashed? anybody?

  • Mhluzi Bhaka - 2010-05-18 16:20

    Interesting that ValorIT's website was developed using Joomla - a free open source content management system...

  • Tshiginga - 2010-05-18 16:22

    Fellas, I am equally disgusted by these but you must realise that fingered will face the music.If it was during apartheid days, you would not have known about this. Thanks to democracy, this kind of things can be brought to public attention.

  • Sello - 2010-05-18 16:26

    It boggles my mind how govt keeps continuing with BEE when it's failing on a daily basis like this. I think when the ANC fought for liberation, there was no solid plan made for life after apartheid. When there was no plan, you will see chaos everywhre all the time.

  • MNATERI - 2010-05-18 16:28

    Yes,cipro is experiencing some IT challenges,everyday the website is up and down and worse today it's not working at all.I believe that they really need the service of an IT company with vast IT experience,however this amount of tender leaves a lot to be desired.

  • Cools - 2010-05-18 16:31

    Here's Valor's contact email - - time for the public to demand they return the funds.

  • Dave - 2010-05-18 16:50

    @Tshiginga I have to agree with you on your point. But hey this has too stop sometime

  • C the light - 2010-05-18 16:52

    My fellow black men, as a black man I am qualified to reveal certain perceptions we need to fight against. Currently our fellow white South Africans are right to adopt some racial prejudices - their exposure to black people is limited to taxi drivers, violent criminals, corrupt politicians, Malema, JZ and his sex scandals and non performing government managers. We need to change this by following the Dr. Ramphele's, Mandela's, Ramaphosa's of the world, those that make a difference and ensure South Africa is a better place for our effort. Talk is cheap lets change our behaviour!

  • igloonaut - 2010-05-18 16:54

    It makes no difference what the race of the people involved are. This is corruption!!! and we are tired of it. Saying that it happens in the rest of the world does not make it right! Sure it also happened in the pre-democratic SA, but there were so many other immoral acts and laws too, such as prohibiting people from participating in society and business because of the colour of their skin, oh wait...

  • Mtabeli Ngwenya - 2010-05-18 16:58

    Tshiginga - How long will this keep happening? Why after 10 years does our ANC keep failing us?! Why do I keep voting for my brothers when they don't know how to manage my tax money that I worked hard for?!!

  • JDV - 2010-05-18 17:13

    Go have a look, Valor IT didn't create their own website. A Company called Riverside did. Amazing!!! What do I (as a whity) have to do to secure a tender like this...?

  • Jurie - 2010-05-18 17:13

    To Faritec that was tendering for this job - go and sue CIPRO and SITA - then you won't need to delist!!!;-) Others greed causing others to bleed - shame on you!!!

  • Graham - 2010-05-18 17:20

    ANC Another National Corruption

  • Mehluli - 2010-05-18 17:32

    How do we develop small companies,and how will we award them contracts.Do black companies have to be baby seated in order for them to perform.Lets find ways of resolving these and other issues rather than to blam BEE.

  • Gatvol - 2010-05-18 18:40

    White man i want to BBBEEE like you!!

  • pages:
  • 1
  • 2