Home South African National Treasury blacklists 143 service providers

National Treasury blacklists 143 service providers

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The Special Investigating Unit has made 506 referrals for blacklisting to state departments and entities.

Deputy Minister of Finance David Masondo. Picture: Supplied

THE NATIONAL Treasury says it has a total of 143 service providers that are currently in the database of restricted suppliers.

“We have to date 56 such companies that have been blacklisted or restricted and there have been a total of 87 directors that are on the restricted supplier list,” acting chief procurement officer Molefe Fani said.

Fani revealed this when he briefed the standing committee on public accounts (Scopa) on the blacklisting of companies that were implicated in malpractice or irregularities while doing business with the state.

He said 26 service providers were blacklisted for periods ranging between one and three years, 94 for a period of four to six years, and 23 are restricted from trading with the state for a period of seven to 10 years.

Fani, however, said there were no service providers in the defaulter database for companies when the court invoked sections of the Prevention and Combating of Corrupt Activities Act by ordering a person’s name be endorsed in the register for tender defaulters.

He said accounting officers involved have not indicated to the National Treasury the need for the registration of suppliers and defaulters.

“Accounting officers don’t inform us on cases of restriction and where there is a default judgment. We run short of notifications,” Fani said.

In its report to Scopa, the Special Investigating Unit (SIU) said it had made 506 referrals to different accounting authorities of departments and entities.

SIU head Andy Mothibi said that as they investigated and picked up corruption, irregularities, poor performance and poor project management, they made findings as part of their recommendations for purposes of consequence management with regard to blacklisting of suppliers.

“We want to underscore that we need to hold those responsible for irregularities and wrongdoing to account. This straddles across all areas, whether its public sector private sector, officials or even service providers.

“This is one such area we really demonstrate that where there are irregularities we are geared up to ensure that there is consequence,” Mothibi said.

Finance Deputy Minister David Masondo said the blacklisting of companies and individuals was an important step in fighting corruption and to entrench a culture of good governance throughout the state and its entities.

“The common thread in the circumstances that lead to blacklisting is mainly under-performance with incomplete projects and corruption.

“It is a well-known fact that individuals in private companies and in the state engage corrupt activities,” Masondo said.

He said corruption was a major problem in the country, because it not only robbed the poor of services but also deterred investment.

“If investors know that they have to incur an extra cost to get certain things done, they would not invest.”

Masondo also said corruption affected the country’s ability to raise tax revenue.

“If a government official lets goods pass through the border without paying official duties, both the company concerned and state officials deny South Africans tax revenue,” he said, adding that corruption killed entrepreneurship.

The deputy minister said they were aware of poor performance enabled by the state.

“We are aware that there are instances in which poor performance by companies is a result of poor project management.”

He made an example of Eskom’s Medupi and Kusile build programme, which ran into cost overruns and possible corruption.

“Eskom debt was R255 billion in 2014, and increased to R450bn in 2019 largely due to cost overruns,” Masondo said.

He added that failure to pay service providers within 30 days created cash-flow problems leading to companies failing to provide goods and services to the state efficiently.

“We need to craft regulations that punish accounting officers who fail to pay companies within 30 days,” he said.

Political Bureau

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