Firms that built South Africa, Zimbabwe border fence lose appeal to keep profits

Spread This News

By Sunday World

The Supreme Court of Appeal (SCA) has dismissed an application by companies that erected the controversial fence between the border of South Africa and Zimbabwe.

The application was brought by Caledon River Properties and Profteam to appeal a decision of the High Court and the Special Tribunal. The decision was to strip them of profits earned from the construction of a border mesh fence between South Africa and Zimbabwe during the Covid-19 pandemic.

SCA judgment welcomed

On Wednesday, the Special Investigating Unit (SIU) said it welcomed the judgement of the Supreme Court of Appeal. The SCA dismissed the special leave to appeal application.

The SIU said the SCA dismissed the application with costs because the requirements for special leave to appeal were not satisfied.

SIU said soon after the fence was erected in March 2020, it started to fall apart.

In July 2020, President Cyril Ramaphosa authorised the SIU, through a proclamation, to investigate the affairs of all state institutions (SOEs). This in respect of the procurement or contracting for goods, works, and services. The procurements carried out during or in respect of the National State of Disaster, by or on behalf of the SOEs.

“The proclamation prompted the SIU to investigate the awarding of contracts to Caledon River Properties Pty Ltd and Profteam CC.

Multimillion rand contracts set aside due to procurement irregularities

“In March 2022, the Special Tribunal reviewed and set aside two contracts awarded to service providers. These were awarded by the Department of Public Works and Infrastructure to the value of R40.4-million. The contracts were for constructing the razor mesh fence between South Africa and Zimbabwe,” said the SIU.

The SIU said the tribunal also ordered the service providers to be divested of the profits earned from the multimillion-rand contracts.

“The service providers agreed to the declaration of invalidity of the contracts due to procurement irregularities. However, they appealed to the full bench of the High Court to challenge the Special Tribunal’s order. For depriving them of the profits made from the impugned contracts,” said the SIU.

Conditions set by the SCA: The SIU said the Supreme Court of Appeal upheld the High Court’s order and conditions, which are: The application is dismissed with costs; Service providers must, within 30 days, file audited statements and debatement of accounts.

These must reflect their respective income and expenditure in the contracts;

SIU and Public Works Department are ordered to appoint, within 30 days thereafter, qualified expert(s).

These experts are to compile a report as to the reasonableness of the service providers’ expenses and file papers;

The service providers are ordered to pay the public works department, within 30 days, profit earned from the contracts. This as agreed by the experts and made the order of the Tribunal; and

SIU welcomes the Supreme Court of Appeal’s order.

The order enforces the implementation of the SIU’s investigation outcomes and consequence management to recover financial losses suffered by the state due to negligence or corruption.