Bosasa prison-catering contract was a money-laundering scheme – Dennis Bloem

Former chairperson of the parliamentary committee on correctional services, Dennis Bloem, who served in the role from 2004 to 2009, told the commission of inquiry into state capture on Friday that during former commissioner Linda Mti’s tenure there was “havoc” at the department of correctional services (DCS).

Former Bosasa COO Angelo Agrizzi’s marathon testimony at the committee alleged that under Mti as commissioner and Patrick Gillingham as COO, the DCS became a conduit for tenders solely awarded to Bosasa (now African Global Operations) to the exclusion of other potential bidders.

Among the tenders Bosasa scored, were the following:

• A R239,427,694 annual catering contract awarded in 2004, which ran for three years;
• A R14,000,000 monthly contract for the erection of seven satellite correctional centres which had to be included in the catering tender authorised on May 17, 2005;
• A two-year R236,997,385.31 access control contract awarded to Sondolo IT (Pty) Ltd – a subsidiary of Bosasa – on April 11, 2005;
• A R486,937,910 fencing tender awarded to Phezulu Fencing (Pty) Ltd – a Bosasa BEE front company – on November 29, 2005; and
• A sum of R224,364,480 awarded to Sondolo IT on March 3, 2006, for designing a system where a TV would be placed in every cell.

Bloem told the commission that the parliamentary committee was opposed to the department’s decision to outsource certain services.

Bloem told the commission the committee had questioned the department on whether a feasibility study was conducted before the decision to outsource services was taken and that it learned it was not done.

He said the Public Management Financial Act was flouted and that tenders were not advertised for the contracts of outsourcing services, which including catering, fencing, and the installation of television sets in prisons.

The function of a feasibility study would have been necessary to determine whether the department’s budget would allow for outsourcing and whether this was necessary.

“That feasibility study, that document never came to us,” Bloem told the commission.

He told the commission that the committee noted there were other priorities within the department, such as increasing workers’ salaries and establishing dedicated juvenile facilities due to overcrowding in prisons throughout the country, rather than outsourcing catering and security services.

“This thing of outsourcing was not a priority, it was just manufactured by the department,” Bloem said.

The commission heard testimony earlier this week by a former Bosasa employee, Frans Vorster, about how the company’s CEO, Gavin Watson, instructed him to build a relationship with Gillingham, whom he, Vorster, allegedly bribed with amounts varying from R5,000 to R10,000, with the most being R20,000 in cash, for information which led to Bosasa being awarded the catering contract in 2004.

Vorster told the commission that a Bosasa consultant, Danny Mansell, assisted the department’s tender committee on a presentation and strategy and that at the end of 2003, a Bosasa team met with DCS officials to make a presentation for outsourcing catering services before it was known that the department would decide to do so.

Bloem said on Friday the committee had been opposed to outsourcing these services because “it was a waste of the taxpayers’ money”.

“This catering was just a money-laundering scheme,” Bloem said.

He said though Bosasa had said it would take over the cooking in prisons, however, the inmates continued to carry out this duty, thus “it was a blue lie”.

“[Bosasa] was just taking the money,” he said, saying the company did not provide any labour and the inmates continued to do the work.

Bloem said the committee never got an answer as to who was supplying the food at prisons even though the department had farms to grow various types of foods, with it, the committee, questioning the need to outsource when such farms existed to service the country’s prisons.

“The only thing that they, Bosasa, was doing is to give them a certificate at the end of the year to say they have received training for doing the work,” Bloem said.

He said these concerning issues of outsourcing, awarding of tenders to Bosasa, and getting value for money for these contracts were raised “many a time” with parliament but nothing was ever done.

Bloem’s testimony continues:

(Additional reporting by Brian Sokutu)

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