Companies that allegedly illegally pocketed R588m from tender want preservation order set aside

Counsel for one of the companies that allegedly illegally pocketed R588m meant to refurbish the AngloGold Ashanti Hospital in Carletonville has argued that the Special Investigating  Unit (SIU) did not make a case to obtain a preservation order against them.

Advocate Tshepho Sibeko made this argument before the Special Tribunal on behalf of Pro Serve Consulting during a virtual hearing on Tuesday.

Pro Serve Consulting and Thenga Holdings have applied to the tribunal for the reconsideration of an interim preservation order the SIU obtained on September 17.

The tribunal granted an order freezing amounts of R1.7m and R6.2m respectively from accounts belonging to both companies.

The SIU alleged the appointment of Thenga Holdings was done by a panel whose legal mandate had expired.

According to the SIU, Pro Serve Consulting was appointed to render professional architect, electrical, mechanical, civil, and structural engineering, while Thenga Holdings would provide general construction work.

In its papers the SIU also argued there had been no explanation for the increase in the cost of the refurbishment going from an estimated R50m to R588m.

In the review application, Sibeko argued that what was supposed to be evidence of a prima facie case prepared by the SIU did not form part of the papers submitted before the tribunal.

“The prima facie case relied upon is not supported by the investigation report. Reliance is placed on a so-called expert report that suggests over-pricing by the service providers. What is significant about the report is that it has not been confirmed under oath.

“The fees charged by the first respondent [Pro Serve Consulting] are only a percentage of the costing of the costs prepared by an entity. There is no factual basis that a proper case could be found to have been made.”

Sibeko said the companies were bringing the application in circumstances where the project had been completed and the hospital had started to accept patients.

“The hospital has started to derive a benefit from the services rendered,” he argued.

He contended that his client had not been able to conduct business because of the preservation order.  

The respondents, Sibeko argued, were appointed in terms of the procedure set out in the papers.

“There is a clear case that contrary to what was conveyed, there was an open tender process sought to provide a service.”

The amount paid to the respondents did not prove there were any irregularities in the procurement process, Sibeko argued.

All the requirements were complied with, he said.

“In the absence of evidence to demonstrate overpricing of the services, there could not have been a prima facie case. The applicant ought to have brought before the tribunal and disclosed all information available with regards to its investigation, some of which would not have supported its case,” said Sibeko.

“A clear case would have been made and all facts available ought to have been disclosed. The failure to make such disclosures precludes the SIU from being granted the order.”

He said while there was criticism that there was an escalation of the price, it could not be put on the “doorstep” of Pro Serve Consulting.

“The first respondent did not cause the price escalation from R50m to what was eventually the cost of the project.”

The hearing continues.

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