South Africa Probes Dubious Virus Contracts Worth $292 Million

(Bloomberg) -- South Africa’s specialized crime unit is investigating allegations of impropriety in the awarding of 658 government contracts worth more than 5 billion rand ($292 million) for equipment and services to tackle the coronavirus pandemic.

The unit was acting on information that the procurement of personal protective equipment, hospital and quarantine sites, catering services, ventilators and wheelchairs didn’t comply with the law, according to Andy Mothibi, the head of the Special Investigating Unit. Some suppliers overcharged for services, were paid without providing proof of delivery and lacked tax-clearance certificates, Mothibi said in a written presentation to lawmakers. Certain officials allegedly gave contracts to their friends, he added.

The scandal is particularly embarrassing for President Cyril Ramaphosa, who has pledged to clamp down on graft that became endemic during his predecessor Jacob Zuma’s nine-year rule. Those implicated include Khusela Diko, Ramaphosa’s spokeswoman, who took leave of absence after it emerged that her husband’s company won a 125 million-rand contract to supply protective equipment to the health department in central Gauteng province.

The Special Investigating Unit is one of nine agencies that Ramaphosa ordered to probe breaches of the rules, and it is specifically mandated to recoup state funds that are paid out illicitly. The president has given assurances that perpetrators will face criminal prosecution.

National and provincial government departments, several municipalities and scores of companies will be investigated for being party to allegedly illegal deals, Mothibi said. The biggest disbursements under investigation are 2.2 billion rand made by the health department in respect of 157 contracts in Gauteng and 622.4 million rand that the same department paid for 239 contracts in the Eastern Cape province.

South Africa has confirmed 592,144 coronavirus cases so far, the most in Africa and the fifth-highest in the world.

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