Special Tribunal Cancels IDT Contracts and Orders Companies to Repay Profits

The IDT was responsible for overseeing projects such as security fencing and infrastructure audits at several correctional centers.

The Special Tribunal has nullified two Independent Development Trust (IDT) contracts totaling approximately R1.6 billion and mandated the five companies involved to repay all profits gained from these contracts. This decision follows an extensive investigation by the Special Investigating Unit (SIU) into the Department of Correctional Services' affairs.

The SIU's investigation revealed that the IDT, tasked with managing various infrastructure projects at South Africa’s correctional facilities, failed to adhere to statutory and regulatory procurement regulations as outlined in the South African Constitution. The IDT was responsible for overseeing projects such as security fencing and infrastructure audits at several correctional centers.

Initially, the IDT appointed Secelec Consulting Engineers (Pty) Ltd, Bakone Consulting Engineers (Pty) Ltd, and Bakone Secelec Consulting JV 2011 as transactional advisors for fence construction projects, with a contract value of R492,960,564.66. This contract was eventually canceled.

In 2012, the IDT engaged Manyeleti Consulting SA (Pty) Ltd and SA Fence and Gate JV for similar work, with the project budget increasing significantly by R72,454,350.62, or 15.2%. The total budget eventually soared to R861,255,544.40—an 81% increase over the initial budget, far exceeding the 20% deviation limit set by National Treasury regulations. The Tribunal determined that the contract award process was predetermined and irregular.

The SIU praised the Tribunal's decision, which aligns with the ongoing efforts to implement investigation outcomes and manage consequences to recover financial losses. The Tribunal has ordered the five companies to provide detailed accounts of all payments and reasonable expenses related to the contracts, supported by vouchers. The companies are also required to cover the legal costs of the review application.

The SIU emphasized that any evidence of criminal conduct uncovered during this process will be referred to the National Prosecuting Authority (NPA) for further action.