Covid PPE service providers forced to pay back R21 million from inflated contracts

Service providers who unlawfully profited from the global health panic of 2020 will be forced to pay back the value of the contracts they were awarded.

The Special Investigating Unit (SIU) secured a Special Tribunal order against 16 service providers who supplied Personal Protective Equipment (PPE) to the KwaZulu-Natal (KZN) Department of Social Development (DSD).

The SIU and the Special Tribunal do not have the authority to institute criminal proceedings, but state they will refer evidence to the National Prosecuting Authority (NPA) in this instance.

Covid contracts

The companies implicated were tied to 18 contracts valued at R21.2 million, explaining that the figures quoted were intentionally inflated.

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Additionally, the SIU found evidence of corruption against officials within the department.

“The contracts were awarded by KZN DSD during the height of the COVID-19 pandemic. The investigation found that all service providers charged rates that exceeded the pricing guidelines set by the National Treasury,” stated the SIU on Tuesday.

“The report further recommended disciplinary action against several officials and the registration of a criminal case,” it continued.

PPE investigations

The SIU stepped in after an initial investigation into the contracts yielded little results.

“The report did not evaluate potential financial recoveries or quantify the state’s losses. Additionally, no efforts were made to recover funds lost due to overpricing or irregular procurement practices,” stated the SIU.

In March 2020, procurement regulations were relaxed to allow the government to respond quickly to the potential threats related to Covid-19.  

A dedicated COVID-19 Audit Report by the auditor-general found the emergency powers were taken advantage of, as reported by Corruption Watch in 2020.

Accusations of fraud as well as wasteful and irregular expenditure involving 600 companies tied to PPE contracts have been investigated by the SIU since 2020.

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