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R420 million tender fraud – Former HOD for Department for Roads and Public Works arrested

A 65-year-old former Head of Department for Roads and Public Works and a company Director are expected to appear before Kimberley Magistrates’ court on 23 May 2023, facing charges of contravention of Public Finance Management Act, fraud, corruption and money laundering.

Both accused persons were arrested on the morning of 23 May 2023, by the Hawks Serious Corruption Investigation team in Kimberley.

It is alleged that during 2003, Northern Cape Department of Health together with the Department of Roads and Public Works as implementing agents, embarked on a project to construct a new Mental Health Facility in Kimberley.

The original contract was to an amount of two hundred and nighty million rand (R290 million).

It is further alleged that some of the constructed buildings faced possible demolition after four hundred and twenty million rand (R420 million) was paid to a liquidated contractor on a project that was originally budgeted for two hundred and ninety million rand (R290 million).

It was discovered that the company that was appointed did not have the capacity to render the service and contract was terminated whilst money was already paid. Work on the project has since been halted, leaving the facility incomplete and unusable, and at a considerable cost to the Department of Health.

Officials did not follow normal procurement procedures when appointing the consultant.

The Mental Health hospital whilst under construction, experienced issues of maladministration for the years that the project was in progress. There was no value for money. Provincial Head of the Directorate, Major General Stephen Mabuela welcomes the arrest and applauded the investigation team and prosecution team for their diligent work under difficult circumstances. Further arrests are imminent.

SAPS Newsroom

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