The Special Investigating Unit (SIU) has welcomed the Supreme Court of Appeal’s (SCA) judgment dismissing an application by two companies involved in the construction of the unstable Beitbridge border fence in 2020.
Caledon River Properties (Pty) and Profteam CC had applied to the SCA to reconsider an order of two judges of the SCA refusing a petition for special leave to appeal against a judgment of the full bench of the Pretoria high court.
The high court had in December 2023 dismissed an appeal against a March 2022 order of the Special Tribunal declaring invalid certain contracts concluded during 2020 and directing the companies to repay amounts paid in excess of actual expenditure.
“This was the contractors’ bid to retain profits earned from the unlawful R40m contracts for the construction of a 40km mesh border fence at Beitbridge between South Africa and Zimbabwe during the Covid-19 national state of disaster,” the SIU said in a statement on Friday.
In March 2020, the public works and infrastructure department awarded contracts worth about R40.4m to the two companies without a competitive bidding process, in violation of the constitution and Treasury regulations.
The contractors received large advance payments of about R21.8m before any substantial work was performed. Soon after completion, the fence began to fall apart.
After President Cyril Ramaphosa authorised the SIU to investigate Covid-19 procurement in July 2020, the SIU revealed procurement irregularities and this led to proceedings against the two companies before the Special Tribunal.
In March 2022 the Special Tribunal declared the contracts invalid and ordered the contractors to be stripped of profits, limiting recovery to reasonable and proven expenses.
The contractors then launched a number of unsuccessful appeals, first in the high court and twice in the SCA.
The SIU said the SCA, in its judgment dated January 16, confirmed that the contracts were constitutionally invalid due to procurement irregularities and upheld the principle that no party should profit from unlawful conduct.
“The court ruled that the contractors are entitled only to reimbursement of reasonable and proven expenses, subject to a debatement of accounts, and not to retain profits derived from the irregular contracts.”
The SIU said the SCA judgment reinforced the SIU’s mandate to ensure consequence management and accountability in public procurement.
“It vindicates the rule of law and protects public funds from unjust enrichment. The SIU welcomes the court’s emphasis that justice and equity require denying profit where contractors were active participants in irregular processes.”
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