Latest news with #Broad-BasedBlackEconomicEmpowerment
The Star
22-07-2025
- Business
- The Star
Contextualising the costs and benefits of B-BBEE
Safiyya Patel | Published 3 hours ago The current media debate around Broad-Based Black Economic Empowerment (B-BBEE) has brought fresh attention to the policy's impact on the economy – raising important questions about its effectiveness, costs and outcomes. As this conversation grows louder, it's worth taking a closer look at some of the arguments being made. This article engages critically with aspects of the debate, not to dismiss concerns, but to consider them alongside broader economic realities, the policy's longer-term contributions and the context in which B-BBEE was designed to operate. An example from the debate is a recent study released by Solidarity and the Free Market Foundation (FMF), which arguably overlooks certain key economic implications of B-BBEE. Titled 'The Costs of B-BBEE Compliance,' the report estimates that B-BBEE may reduce South Africa's gross domestic product (GDP) growth by as much as 1.5 to 3% annually, potentially resulting in 96,000 to 192,000 fewer jobs each year. It further contends that the policy disproportionately benefits a narrow elite while imposing undue compliance costs on the broader economy. While such figures demand scrutiny, they also warrant a critical examination of the underlying assumptions, methodology, and, crucially, the broader socio-economic context in which B-BBEE operates. One of the most significant concerns with the FMF/Solidarity report is its presentation of correlation as causation. The paper attributes specific percentages of GDP loss and job losses directly to B-BBEE but does not demonstrate how these impacts were isolated from South Africa's myriad economic challenges. South Africa's macroeconomic environment remains deeply constrained by structural impediments such as: chronic electricity and water shortages, including load shedding; global economic headwinds; endemic corruption; and policy uncertainty and governance deficits. Attributing complex macroeconomic trends solely to B-BBEE risks simplifies a nuanced reality and underestimates the multifactorial nature of South Africa's growth constraints. Equally important is the report's limited treatment of the potential benefits of B-BBEE. Many of which manifest over the medium to long term and are difficult to quantify through conventional compliance cost frameworks alone. Equity equivalent programmes (EEPs) EEPs enable multinational corporations, constrained by global ownership structures, to achieve ownership points through local investments in enterprise development, skills transfer, and innovation. Far from being passive mechanisms, EEPs represent substantial, targeted injections into the domestic economy. IBM, for example, committed ZAR 700 million over ten years to enterprise development, research, and education. This included support for 74 black-owned businesses and fully funded bursaries for dozens of students from disadvantaged backgrounds in critical ICT fields. Samsung also made a substantial commitment, launching a ZAR 280 million EEIP in May 2019, projected to contribute nearly ZAR 1 billion to the South African economy over its ten-year duration. This programme aimed for a measurable impact on job creation, specifically targeting the creation of 262 direct jobs and supporting 13 black-owned and women-owned businesses. A notable focus of Samsung's EEIP is on Black Industrialisation through e-Waste recycling and beneficiation research and development, including the establishment of the first black-owned and operated e-waste beneficiation plant in Africa. These company-specific statistics, alongside broader programme impacts such as J.P. Morgan's Abadali EEIP, which aims for an additional 1,000 permanent jobs and ZAR 2 billion in financing transactions, underscore the crucial role of EEPs in boosting Small and Medium Enterprises (SMEs), particularly black-owned businesses, by providing essential funding, business support, and mentorship. Furthermore, these programmes significantly advance skills development, with more than 2,500 beneficiaries receiving critical skills training, and facilitating technology transfer, aligning with South Africa's national development goals and fostering a more inclusive and skilled workforce. Such initiatives illustrate how EEPs catalyse skills development, promote black industrialisation, and build competitive black-owned enterprises that contribute to both GDP growth and employment. The YES programme directly targets South Africa's intractable youth unemployment crisis. Since its inception in 2018, YES has facilitated over 186,000 quality work experiences for young people, injecting nearly ZAR 11 billion in salaries into the economy. Approximately 45% of participants secure permanent employment after placement, and 17% establish their businesses, multiplying the long-term economic benefit. The initiative also incentivises private sector participation by offering measurable B-BBEE recognition for companies that create these opportunities. ESD remains a cornerstone of the B-BBEE framework, driving significant investment into the SMME sector. South African corporates reportedly channel ZAR 20 to ZAR 30 billion annually into ESD programmes, helping integrate black-owned businesses into supply chains and enabling sustainable growth. For instance, the Shoprite Group's CredX programme has provided ZAR 10 billion in working capital to suppliers, while its Next Capital initiative has invested ZAR 20 million to support new black-owned enterprises. Collectively, such interventions empower black entrepreneurs, expand the tax base, and generate employment in communities historically excluded from meaningful economic participation. Perhaps the most profound omission in the Solidarity and FMF report is its decontextualised approach to B-BBEE's rationale. Apartheid was not merely a political system; it was an economic design that systematically dispossessed black South Africans of land, capital, skills, and opportunities. This entrenched economic disenfranchisement cannot be dismantled simply by repealing discriminatory laws. B-BBEE emerged as a policy instrument to facilitate redress, promote equitable economic participation, and mitigate the persistent structural inequality that threatens social cohesion and long-term stability. Any analysis that fails to account for this historical imperative and the potential socio-economic cost of neglecting it is incomplete. There is little doubt that B-BBEE can and should be improved. Calls for greater transparency, genuine empowerment outcomes, and tighter controls to prevent fronting and inefficiency are well-founded. However, presenting a one-sided narrative that focuses exclusively on compliance costs while disregarding significant economic and social returns undermines the opportunity for a more balanced, evidence-based debate. Balancing costs, benefits, and context As South Africa grapples with the challenges of inclusive growth, any meaningful conversation about the future of B-BBEE must extend beyond a narrow cost-benefit calculus. It must weigh the policy's role in addressing historical injustices, its measurable and often intangible benefits, and the opportunity costs of not transforming the economy. A policy of this nature should not be romanticised or demonised without context. Instead, it demands honest, nuanced engagement, one that prioritises national development, social cohesion, and sustainable, broad-based participation in the economy. Moving forward, the question should not be whether B-BBEE has costs but rather whether we are collectively doing enough to ensure that its benefits are fully realised and that it continues to evolve to serve the South Africa we aspire to build. Safiyya Patel, Managing Partner at Webber Wentzel
IOL News
21-07-2025
- Business
- IOL News
Contextualising the costs and benefits of B-BBEE
Unsplash As South Africa grapples with the challenges of inclusive growth, any meaningful conversation about the future of B-BBEE must extend beyond a narrow cost-benefit calculus. Image: Unsplash The current media debate around Broad-Based Black Economic Empowerment (B-BBEE) has brought fresh attention to the policy's impact on the economy – raising important questions about its effectiveness, costs and outcomes. As this conversation grows louder, it's worth taking a closer look at some of the arguments being made. This article engages critically with aspects of the debate, not to dismiss concerns, but to consider them alongside broader economic realities, the policy's longer-term contributions and the context in which B-BBEE was designed to operate. An example from the debate is a recent study released by Solidarity and the Free Market Foundation (FMF), which arguably overlooks certain key economic implications of B-BBEE. Titled 'The Costs of B-BBEE Compliance,' the report estimates that B-BBEE may reduce South Africa's gross domestic product (GDP) growth by as much as 1.5 to 3% annually, potentially resulting in 96,000 to 192,000 fewer jobs each year. It further contends that the policy disproportionately benefits a narrow elite while imposing undue compliance costs on the broader economy. While such figures demand scrutiny, they also warrant a critical examination of the underlying assumptions, methodology, and, crucially, the broader socio-economic context in which B-BBEE operates. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad loading Causality and complexity: What the report overlooks One of the most significant concerns with the FMF/Solidarity report is its presentation of correlation as causation. The paper attributes specific percentages of GDP loss and job losses directly to B-BBEE but does not demonstrate how these impacts were isolated from South Africa's myriad economic challenges. South Africa's macroeconomic environment remains deeply constrained by structural impediments such as: chronic electricity and water shortages, including load shedding; global economic headwinds; endemic corruption; and policy uncertainty and governance deficits. Attributing complex macroeconomic trends solely to B-BBEE risks simplifies a nuanced reality and underestimates the multifactorial nature of South Africa's growth constraints. Safiyya Patel, Managing Partner at Webber Wentzel Image: Supplied The neglected side of the ledger: B-BBEE's economic contributions Equally important is the report's limited treatment of the potential benefits of B-BBEE. Many of which manifest over the medium to long term and are difficult to quantify through conventional compliance cost frameworks alone. Equity equivalent programmes (EEPs) EEPs enable multinational corporations, constrained by global ownership structures, to achieve ownership points through local investments in enterprise development, skills transfer, and innovation. Far from being passive mechanisms, EEPs represent substantial, targeted injections into the domestic economy. IBM, for example, committed ZAR 700 million over ten years to enterprise development, research, and education. This included support for 74 black-owned businesses and fully funded bursaries for dozens of students from disadvantaged backgrounds in critical ICT fields. Samsung also made a substantial commitment, launching a ZAR 280 million EEIP in May 2019, projected to contribute nearly ZAR 1 billion to the South African economy over its ten-year duration. This programme aimed for a measurable impact on job creation, specifically targeting the creation of 262 direct jobs and supporting 13 black-owned and women-owned businesses. A notable focus of Samsung's EEIP is on Black Industrialisation through e-Waste recycling and beneficiation research and development, including the establishment of the first black-owned and operated e-waste beneficiation plant in Africa. These company-specific statistics, alongside broader programme impacts such as J.P. Morgan's Abadali EEIP, which aims for an additional 1,000 permanent jobs and ZAR 2 billion in financing transactions, underscore the crucial role of EEPs in boosting Small and Medium Enterprises (SMEs), particularly black-owned businesses, by providing essential funding, business support, and mentorship. Furthermore, these programmes significantly advance skills development, with more than 2,500 beneficiaries receiving critical skills training, and facilitating technology transfer, aligning with South Africa's national development goals and fostering a more inclusive and skilled workforce. Such initiatives illustrate how EEPs catalyse skills development, promote black industrialisation, and build competitive black-owned enterprises that contribute to both GDP growth and employment. Youth employment service (YES) The YES programme directly targets South Africa's intractable youth unemployment crisis. Since its inception in 2018, YES has facilitated over 186,000 quality work experiences for young people, injecting nearly ZAR 11 billion in salaries into the economy. Approximately 45% of participants secure permanent employment after placement, and 17% establish their businesses, multiplying the long-term economic benefit. The initiative also incentivises private sector participation by offering measurable B-BBEE recognition for companies that create these opportunities. Enterprise and supplier development (ESD) ESD remains a cornerstone of the B-BBEE framework, driving significant investment into the SMME sector. South African corporates reportedly channel ZAR 20 to ZAR 30 billion annually into ESD programmes, helping integrate black-owned businesses into supply chains and enabling sustainable growth. For instance, the Shoprite Group's CredX programme has provided ZAR 10 billion in working capital to suppliers, while its Next Capital initiative has invested ZAR 20 million to support new black-owned enterprises. Collectively, such interventions empower black entrepreneurs, expand the tax base, and generate employment in communities historically excluded from meaningful economic participation. The enduring shadow of apartheid: Why B-BBEE still matters Perhaps the most profound omission in the Solidarity and FMF report is its decontextualised approach to B-BBEE's rationale. Apartheid was not merely a political system; it was an economic design that systematically dispossessed black South Africans of land, capital, skills, and opportunities. This entrenched economic disenfranchisement cannot be dismantled simply by repealing discriminatory laws. B-BBEE emerged as a policy instrument to facilitate redress, promote equitable economic participation, and mitigate the persistent structural inequality that threatens social cohesion and long-term stability. Any analysis that fails to account for this historical imperative and the potential socio-economic cost of neglecting it is incomplete. Towards a more constructive conversation There is little doubt that B-BBEE can and should be improved. Calls for greater transparency, genuine empowerment outcomes, and tighter controls to prevent fronting and inefficiency are well-founded. However, presenting a one-sided narrative that focuses exclusively on compliance costs while disregarding significant economic and social returns undermines the opportunity for a more balanced, evidence-based debate. Balancing costs, benefits, and context As South Africa grapples with the challenges of inclusive growth, any meaningful conversation about the future of B-BBEE must extend beyond a narrow cost-benefit calculus. It must weigh the policy's role in addressing historical injustices, its measurable and often intangible benefits, and the opportunity costs of not transforming the economy. A policy of this nature should not be romanticised or demonised without context. Instead, it demands honest, nuanced engagement, one that prioritises national development, social cohesion, and sustainable, broad-based participation in the economy. Moving forward, the question should not be whether B-BBEE has costs but rather whether we are collectively doing enough to ensure that its benefits are fully realised and that it continues to evolve to serve the South Africa we aspire to build. Safiyya Patel, Managing Partner at Webber Wentzel
The Citizen
12-07-2025
- Business
- The Citizen
SIU obtains R67m recovery order against plumbing contractor
The Special Investigating Unit (SIU) has secured a recovery order of R67m against a plumbing contractor associated with the Department of Public Works, preventing a potential loss of R33m. Contracts declared invalid and unlawful This action follows the Special Tribunal's review, which led to the cancellation of contracts totalling R67m that were awarded to Kroucamp Plumbers between 2015 and 2019. These contracts were for services related to vacuum pumping of septic tanks and emergency interventions for sewage blockages. 'The tribunal has declared these contracts invalid and unlawful and has ordered the service provider to refund the funds received from the department in relation to these contracts,' a statement from the SIU read. Counterclaim dismissed According to the SIU, the comprehensive financial recovery includes R46.6m from invalid 2015 to 2017 contracts, and R20m from unlawful 2017 to 2019 tenders. The tribunal also dismissed a counterclaim of R33m, which Kroucamp Plumbers had submitted against the department. 'This counterclaim was effectively contested by the SIU, resulting in a favourable outcome for the department.' SIU investigation reveals misconduct The order follows an investigation conducted by the SIU, which uncovered a complex network of corruption involving falsified bidding documents, undisclosed conflicts of interest, and payments made to officials who manipulated the tendering process. 'The investigation revealed that Kroucamp Plumbers misrepresented its Broad-Based Black Economic Empowerment (B-BBEE) status, submitted incomplete bidding information, and colluded with departmental officials to secure contracts totalling millions of rands.' Kroucamp might be held personally responsible In addition, the tribunal determined that the company's director, Johannes Jacobus Kroucamp, exploited the corporate structure for personal gain, thereby jeopardising the interests of the state. 'Judge David Makhoba emphasised the gravity of the misconduct, indicating that the tenders breached constitutional procurement regulations and eroded public trust. 'The ruling annuls both contracts and revokes the juristic personality of Kroucamp Plumbers, requiring the company to compensate the state for the financial losses incurred. Consequently, Kroucamp may be held personally accountable for the company's debts owed to the state,' the statement said. The SIU conducted its investigation into the Kroucamp Plumbers corruption case under Proclamation R20 of 2018. 'This proclamation authorised the SIU to investigate allegations of serious maladministration, improper conduct, and corruption in the awarding of tenders by the Department of Public Works and Infrastructure.' The SIU explained that it is also empowered to institute civil action in the High Court or a Special Tribunal to address any wrongdoing uncovered during investigations related to corruption, fraud or maladministration. In line with the Special Investigating Units and Special Tribunals Act 74 of 1996, the SIU refers any evidence of criminal conduct it uncovers to the National Prosecuting Authority for further action. – Breaking news at your fingertips… Follow Caxton Network News on Facebook and join our WhatsApp channel. Nuus wat saakmaak. Volg Caxton Netwerk-nuus op Facebook en sluit aan by ons WhatsApp-kanaal. Read original story on At Caxton, we employ humans to generate daily fresh news, not AI intervention. Happy reading!
IOL News
12-07-2025
- Business
- IOL News
Millions spent, jobs lost as Tourism Equity Fund scandal exposed
The meeting, led by Minister Patricia de Lille, exposed a web of implementation challenges, transparency failures, and accountability concerns that have plagued the fund since its inception. Image: Ayanda Ndamane/Independent Media IN a tense and revealing session recently, the Select Committee on Economic Development and Trade convened to hear testimony from the Department of Tourism regarding the beleaguered Tourism Equity Fund (TEF). The meeting, led by Minister Patricia de Lille, exposed a web of implementation challenges, transparency failures, and accountability concerns that have plagued the fund since its inception. The TEF, launched in 2021 with the aim of driving transformation and inclusive growth in South Africa's tourism sector, has been mired in legal battles, administrative delays, and allegations of mismanagement. A court challenge brought by AfriForum and Solidarity initially halted the fund, which was only revived after an out-of-court settlement in mid-2023. Despite this, the fund's rollout has continued to face serious hurdles — most notably, the refusal of the Small Enterprise Finance Agency (Sefa), now known as Sedfa, to release critical beneficiary information to the Department of Tourism. De Lille opened the meeting by acknowledging the complexity of the situation: 'We appreciate the opportunity to present on the TEF, and we request the Committee's support in helping us move the process forward.' Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ She explained how her predecessor had initially set the fund's black economic empowerment threshold at 51%, exceeding the legislated 30% requirement under the Broad-Based Black Economic Empowerment (B-BBEE) codes. This decision was challenged in court by AfriForum and Solidarity, and the government lost the case on jurisdictional grounds. Following her appointment in 2023, de Lille engaged directly with the litigants and brokered a settlement to unblock the R2.1 billion fund. She described the decision-making process in candid terms: 'I made a deliberate decision to set aside political pride to serve the interests of the sector and the country… I proposed a settlement in the spirit of recovery and collaboration, given the urgency of economic reconstruction following the pandemic.' The revised framework, approved by Cabinet in August 2023, allocates 80% of funding to existing SMMEs and 20% to new entrants, a policy shift that drew sharp criticism from several committee members. The Department outlined how Sefa, appointed as the implementing agent for the TEF, had failed to meet expectations: 'Due to ongoing challenges with Sefa's performance, the Department informed them in early 2025 of our decision to terminate the agreement,' De Lille said. Despite terminating the service-level agreement, the Department is still awaiting a full close-out report from Sefa. More troublingly, Sefa has refused to disclose details of beneficiaries, citing the Protection of Personal Information Act (Popia). 'They refuse to disclose the names of applicants who benefited from the TEF,' the Minister said. 'We disagree with their position and have sought legal opinion confirming that the Department is entitled to receive this information.' Legal advice obtained by the Department supports this view, reinforcing that Parliament, as an oversight body, also has a right to access such data. The legal opinion, circulated during the meeting, recommended including confidentiality clauses in future agreements to ensure Popia compliance while maintaining transparency. 'Parliament must be able to exercise its oversight function,' said Mmaditonki Setwaba, the deputy director-general of Tourism Sector Support Services. Committee members raised urgent questions about the cost per job created through the TEF. The DA's Nicolaas Pienaar expressed alarm: 'Based on the figures presented, nearly R1 million has been spent per job created. In my view, R1m should result in at least four jobs.' His sentiment was echoed by the FF+'s Hendrik van den Berg, who pointed to staggering disparities: 'In the Northern Cape, two jobs were created at a cost of R4.4m each. In the North West, ten jobs came at a cost of over R8m per job.' Setwaba responded that while some projects were capital-intensive, particularly in the accommodation and travel sectors, the Department was aware of the need for better value-for-money outcomes. 'We are learning from the rollout and working on enhanced pre-investment support and streamlined compliance processes,' she said. The lack of detailed breakdowns on the nature of these jobs — whether part-time, seasonal, or permanent — further deepened scepticism among members. The PA's Bino Farmer questioned the regional distribution of funds and the effectiveness of outreach campaigns in rural areas: 'How many applications came from the Western Cape? How many were rejected and why? If the fund is meant to drive transformation, why allocate 80% to existing businesses when new entrants are the ones most in need?' He highlighted the case of Lamberts Bay, where tourism remains racially exclusive and ownership opportunities for black entrepreneurs are limited. 'Communities like mine want to know how people are informed about such funding opportunities. Tourism is spoken about in terms of job creation, but not ownership.' The ANC's Patrick Mabilo lamented the minimal investment in his province despite its rich natural and cultural assets: 'Only one project received funding in the Northern Cape, valued at R8.8 million. Given the scenic richness of the province, including Unesco sites, why hasn't there been more meaningful participation?' He called for clarity on outreach efforts and asked whether the Department could quantify results in rural townships. The chairperson, Sonja Boshoff, from the DA, acknowledged the severity of the situation: 'This is not just about administration, it affects the lives of ordinary South Africans. We cannot allow SEFA to hold the Department or Parliament to ransom.' The Committee resolved to summon Sefa before Parliament, even if it required convening outside normal hours. It also agreed to send a letter to the Minister of Small Business Development, Stella Ndabeni-Abrahams, requesting her urgent engagement with Sefa ahead of their scheduled meeting the following week. 'We expect feedback from her then so that we can determine how best to support the Department going forward,' said the chairperson. The ANC's Mpho Modise supported the idea of a joint session involving both Ministers and Sefa: 'All relevant stakeholders need to be in the same room so we can ask direct questions and get comprehensive answers.' The Minister welcomed the suggestion: 'I welcome the Committee's oversight and support any parliamentary investigation into the administration and outcomes of the Fund.' De Lille did not shy away from the legal and reputational risks involved: 'As the accounting authority, I am fully aware of the possibility of personal liability. But I remain committed to preserving my integrity and resolving this matter as quickly as possible.' Director-general Victor Vele confirmed that no fruitless or wasteful expenditure had yet been recorded, though he admitted that the full financial picture would only emerge once SEFA released its complete records. 'From the perspective of an accounting officer, there is currently no record of fruitless or wasteful expenditure associated with the Fund,' he said. Meanwhile, the Department has identified the Public Investment Corporation (PIC) as the new implementing agent, aligning with the TEF's objective of promoting transformation in the tourism sector. 'We are working on a formal handover process to a new implementing agency, which will be announced following legal and operational finalisation,' said Setwaba. The TEF was conceived as a vehicle for economic transformation and inclusion. Yet five years after its launch, it stands as a cautionary tale of poor governance, legal entanglements, and institutional dysfunction. With Sefa refusing to share basic information, the Department hamstrung by outdated contracts, and Parliament demanding accountability, the TEF has become emblematic of the broader crisis in public administration. Unless swift and decisive action is taken — including full disclosure of beneficiaries, independent auditing, and reform of implementation frameworks — the TEF may well go down as another failed attempt at redress in post-apartheid South Africa. For now, all eyes are on the upcoming joint meeting between the Departments of Tourism and Small Business Development, and on whether SEFA will finally answer the call for transparency. Get the real story on the go: Follow the Sunday Independent on WhatsApp.
IOL News
11-07-2025
- Business
- IOL News
SIU thwarts R33 million claim and recovers R67 million from Kroucamp Plumbers
SIU spokesperson Kaizer Kganyago announces the recovery of R67 million from Kroucamp Plumbers following the Special Tribunal's landmark ruling, which also prevents a potential R33 million loss to the state. Image: File The Special Investigating Unit (SIU) has secured a victory for the state, recovering R67 million from Kroucamp Plumbers (Pty) Ltd after the Special Tribunal reviewed and set aside unlawful contracts awarded by the Department of Public Works and Infrastructure. SIU spokesperson Kaizer Kganyago says the Tribunal's ruling not only recovers public funds but also prevents a potential R33 million loss following the dismissal of a counterclaim brought by Kroucamp Plumbers against the department. The Tribunal declared contracts worth R67 million, awarded between 2015 and 2019 for vacuum pumping of septic tanks and emergency sewage blockage interventions, invalid and unlawful. As a result, the service provider has been ordered to refund all payments received from the department. The financial recovery includes R46 613 873.26 from contracts between 2015 and 2017 and R20 389 052.70 from tenders between 2017 and 2019. The SIU investigation revealed a web of corruption involving falsified bidding documents, undisclosed conflicts of interest, and payments to officials who manipulated the tendering process. "The SIU investigation revealed that Kroucamp Plumbers misrepresented its Broad-Based Black Economic Empowerment (B-BBEE) status, submitted incomplete bidding information, and colluded with departmental officials to secure contracts totalling millions of rand," Kganyago said. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad Loading The Tribunal further found that Mr. Johannes Jacobus Kroucamp, the director of Kroucamp Plumbers, had abused the corporate structure for personal gain, ultimately jeopardising the interests of the state. Judge D. Makhoba highlighted the seriousness of the misconduct, stating that the tenders "breached constitutional procurement regulations and eroded public trust." As part of the ruling, both contracts were annulled, and Kroucamp Plumbers' juristic personality was revoked, making the company liable for repaying the state. This decision opens the possibility for Mr. Kroucamp to be held personally responsible for the company's debts owed to the state. The investigation was conducted under Proclamation R20 of 2018, which empowered the SIU to probe allegations of maladministration, improper conduct, and corruption within the Department of Public Works and Infrastructure's tender processes. "The SIU is also empowered to institute civil action in the High Court or a Special Tribunal to address any wrongdoing uncovered during investigations related to corruption, fraud, or maladministration," Kganyago said. "In line with the Special Investigating Units and Special Tribunals Act 74 of 1996, the SIU refers any evidence of criminal conduct it uncovers to the National Prosecuting Authority for further action." IOL News
