Border fence contractors lose appeal

The Special Investigating Unit (SIU) has welcomed the judgment of the Supreme Court of Appeal (SCA), which dismissed a special leave-to-appeal application brought by Caledon River Properties Pty Ltd and Profteam CC. These companies sought to challenge a decision of the High Court  (HC) and the Special Tribunal that stripped them of the profits earned from the construction of a mesh border fence between South Africa and Zimbabwe during the Covid-19 pandemic.

The SCA dismissed the application with costs last week (10 April) on the grounds that the requirements for special leave to appeal had not been met.

“Soon after the fence was erected in March 2020, it began to deteriorate. In July 2020, President Cyril Ramaphosa authorised the SIU, through Proclamation R23 of 2020, to investigate the procurement and contracting of goods, works, and services during the National State of Disaster by or on behalf of state institutions. This proclamation prompted the SIU to investigate the contracts awarded to Caledon River Properties Pty Ltd and Profteam CC,” said Mr. Kaizer Kganyago, spokesperson for the SIU, in a media statement.

In March 2022, the Special Tribunal reviewed and set aside two contracts awarded by the National Department of Public Works and Infrastructure to the value of R40.4 million for constructing the razor mesh fence between South Africa and Zimbabwe near the Beitbridge border post. The Tribunal also ordered the service providers to be divested of the profits earned from these 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 that deprived them of the profits made from the impugned contracts,” Kganyago explained.

The SCA, however, upheld the HC's order and conditions, which stipulated that the application be dismissed with costs and that the service providers must, within 30 days, file audited statements and a debatement of accounts reflecting their respective income and expenditure from the contracts. The SIU and the Public Works Department (PWD) were also ordered to appoint, within 30 days thereafter, qualified experts to compile a report on the reasonableness of the service providers’ expenses and to file papers; and that the service providers are ordered to pay the PWD, within 30 days, the profits earned from the contracts as determined by the experts and as made the order of the Tribunal.

“The SIU welcomes the Supreme Court of Appeal's order, which 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,” Kganyago stated.

Date:18 April 2024

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