Energy dept probes R80m nuclear contract irregularity – report

The Business Day reports that Minister Mmamoloko Kubayi launched the probe relating to the possible violation of National Treasury’s regulations when awarding the R80-million contract to a nuclear transactional adviser‚ Mahlaka-A-Phalala.

Mahlaka-A-Phalala – which was one of the consulting firms in the nuclear-build programme – at the end of August 2016 reportedly compiled a report that found that the department was not ready to issue a request for proposal for the programme‚ estimated to be worth about R1 trillion, according to reports.

“According to documents seen by Business Day‚ energy director-general Thabane Zulu‚ his deputy, Zizamele Mbambo‚ procurement specialist Ndaba Ngwane and chief financial officer Yvonne Chetty signed a deviation request to sign off the [R80-million] deal.

“Zulu has since been moved to head the Strategic Energy Fund, while Ndaba quietly left the department. Mbambo remained in his position despite awarding the contract,” the report stated.

It is reported Mbambo and Ngwane requested that Chetty and Zulu approve the deviation from normal procurement processes‚ which would allow Mahlaka-A-Phalala to continue work on the development of a transactional adviser.

Chetty and Zulu apparently agreed, with the chief financial officer also warning that such a deviation would be subject to an agreement by Treasury and the office of the attorney-general.

However, Mbambo and Ngwane allegedly told Mahlaka-A-Phalala to continue with a second phase of the contract‚ with the cost of the contract growing from R80 million to R100 million by March without adherence to the required governance processes.

The energy minister at the time, Tina Joemat-Pettersson, reportedly halted all payments related to the transactional adviser to Mahlaka-A-Phalala until the department had submitted a verification report to her on all deliverables received.

But sources told Business Day the decision was allegedly never communicated to Mahlaka-A-Phalala as a service provider.

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