SECOND FINAL REPORT to the President in terms of section 4(1)(f) of the Special Investigating Units and Special Tribunals Act No. 74 of 1996 In Re: Investigation into the procurement of, or contracting for goods, works and services, including the construction, refurbishment, leasing, occupation and use of immovable property, during, or in respect of the National State of Disaster, as declared by Government Notice No. 313 of 15 March 2020, by or on behalf of the State Institutions Proclamation No R23 of 2020 1 December 2021 to 30 June 2022 15 July 2022 rer terre re fertile vk Eat Capra Pu en an at seat 2 4 Fea St Dan Ge Dan 01 1 et ery Tes es hea nase eo (Glny aia, dun ance 25 arose Mebane 18|Unpepa nat, eciman 0 Blan 3 hres 07 Went Cape Rear ses el Hperb ane Pt Pra 725 ‘Neth Pe ts fe wk ear air oO Bl end so ha SED Noting 0087774 | wrwsuagss | Hloptargn NAT_SI_R232020_072022_ Final_638694 Page 1 of 349DISTRIBUTION LIST Copy 1 of2 | Mr Matamela Cyril Ramaphosa: The Honourable President of the Republic of South Africa | Copy 2 of 2 | Advocate JL Mothibi: Head of the Special Investigating Unit a 7 tater tt erat Bg Ms | an Capea Pa ra na ct eset 2140 anv St Orn tal ata, ew owe |e heer eel ho te cone aie Slaron |emags 25sicresttsDhe tombs arm tn Nor 1NO| Unpepr cnt ean bein 3 Mo Seta 70] Wea ape toe coy ting prea ok Pl Nath ala os fe a ear en Bata Fan HD ba Sted Soe SD ein 00877 | wot | Wenn NAT_S1_R232020_072022 Final_638694 Page 2 of 249EXECUTIVE SUMMARY The SIU is honoured to present the second final report to His Excellency, President Matamela Cyril Ramaphosa in terms of section 4(1)(g) of the Special Investigating Units and Special Tribunals Act, 1996 (Act No. 74 of 1996) ("the SIU Act") pursuant to the publication of Proclamation R23 of 2020 (‘the Proctamation’) On 23 July 2020, and with the publication of the Proclamation the President referred certain the affairs of all State institutions (as defined in the allegations of impropriety in connection wi SIU Act) to the SIU and provided the SIU with its terms of reference, which are fully set out in the Schedule to the Proclamation. The investigation spans primarily the period 1 January 2020 and 23 July 2020 (ie. the date of publication of the Proclamation), but also authorises investigations into matters which took piace prior to 1 January 2010 or after 23 July 2020, but are relevant to, connected with, incidental or ancillary to the matters mentioned in the Schedule to the Proclamation or involve the same persons, entities or contracts investigated under authority of the Proclamation. The Proclamation further specifically tasked and authorised the SIU to exercise or perform all the functions and powers assigned to, or conferred upon it by the SIU Act, including the recovery of any losses suffered by State Institutions or the State, in relation to the said matters in the Schedule to the Proclamation. In terms of the SIU Act, as read with Proclamation No. R118 of 2001 and the Proclamation, among the matters that the SIU was required to investigate were: Any alleged — a) serious maladministration in connection with the affairs of the State Institutions; b) improper or unlawful conduct by officials or employees of the State Institutions; °) unlawful appropriation or expenditure of public money or property; a) unlawtul, irregular or unapproved acquisitive act, transaction, measure or practice having a bearing upon State property, e) intentional or negligent loss of public money or damage to public property; tr 1 tere rt renter eg ae Po |r Cpeaen Pl 9 Ween Ae Yt an 140 Ply knee re antral ty Toe rn Sue hn an a ae (clay su ners suaiep anal iv bobo oa Bashers 35 |Lmpopemind et, odiman out 3 Hho, aso 07 een oper en econ bang aperir hesd ai o Pndn, 706 Nath Fe om Oca Sean eng Mur PR Bil ied Set Ma TD ewn00674 | races | Moers NAT_SI_R232020_072022_Final_638694 Page 30f 3499) offence referred to in Parts 1 to 4, or section 17, 20 or 21 (in so far as it relates to the aforementioned offences) of Chapter 2 of the Prevention and Combating of Corrupt Activities Act, 2004 (Act No. 12 of 2004) ("PaCoCA Act") and which offences were committed in connection with the affairs of the State Institutions; or unlawful or improper conduct by any person, which has caused or may cause serious harm to the interests of the public or any category thereof, in relation to following matter(s) as envisaged in the Schedule to the Proclamation, which took place between 1 January 2020 and 23 July 2020 (.. the date of publication of the Proclamation) or which took place prior to 1 January 2020 or afier 23 July 2020, but is relevant to, connected with, incidental or ancillary to the matters mentioned in the Schedule or involve the same persons, entities or contracts investigated under authority of the Proclamation: 1 a) b) °) a) The procurement of, or contracting for, goods, works and services, including construction, refurbishment, leasing, occupation and use of immovable property, during, or in respect of the national state of disaster as declared by Government Notice No. 313 of 15 March 2020, by or on behalf of the State Institutions and payments made in respect thereof in a manner that was— not fair, competitive, transparent, equitable or cost-effective; contrary to applicable— () legislation; (i) manuals, guidelines, practice notes, circulars or instructions issued by the NT or the relevant Provincial Treasury; or (ii) manuals, policies, procedures, prescripts, instructions or practices of or applicable to the State Institutions; ‘conducted by oF facilitated through the improper or uniawful conduct of — (employees or officials of the State Institutions; or (i) any other person or entity, to corruptly or unduly benefit themselves or others; or fraudulent, ecient net ng open Panter Cp Soak 3 ats rr ot esa Oey ana rt Orin D0 1 you esr An Handa nk eke Claes omnes McMeel 12 mp Gn Maton sear 31 Am Ss Plan 07 se Coe Ret fey Big Re Fon Pek Mand 5 ners meer ee Faslan ead aeg| ate ho: PD ator Sets eet 31) Meine 008774 | musica | btoemon NAT_SI_R232020_072022_Final_628694 Page 4 of 349and any related unauthorised, irregular or fruitless and wasteful expenditure incurred by the State Institutions or the State. 2 Any improper or unlawful conduct by the officials or employees of the State Institutions ‘or any other person or entity, in relation to the allegations set out in paragraph 1 above, including the causes of such improper or unlawful conduct and any loss, damage or actual or potential prejudice suffered by the State Institutions or the State. Section 4(1)(f) of the Special Investigating Units and Special Tribunals Act, 1996 (Act No. 74 of 1996) ("the SIU Act’) provides that among the functions of the Special Investigating Unit ("SIU") are, from time to time as directed by the President, to report on the progress made in the investigation and matters brought before the Special Tribunal or any court of law. When the Proclamation was issued, the President directed the SIU to report to him on a six weekly basis regarding the progress of the investigation. To date the SIU has submitted six individual progress reports, one interim report and a final reportto the Presidency. The reports were submitted on the following dates’ . 4* progress report covered the period 24 July 2020 to 28 August 2020 and was submitted on 1 September 2020; . 2° progress report covered the period 29 August 2020 to 2 October 2020 and was submitted on 14 October 2020; . 3 progress report covered the period 6 October 2020 to 17 November 2020 and was submitted on 25 November 2020; . Interim report covered the period 23 July 2020 to 31 January 2021 and was submitted on 26 February 2021; . 4° progress report covered the period 22 February 2021 to 16 April 2021 . 5° progress report covered the period 17 April 2021 to 31 May 2021; . 6" progress report covered the period 1 June 2021 to 9 July 2021; and . Final report covered the period 23 July 2020 to 30 November 2024 Pra ere Se err Btng Ma Pk 3 | ce Cipla Yast nie et ‘vst Pyare one Dr rind Dt > Te ay Tes free 35 en ane Dh he He ‘Geiss Bonnar |pomangu tS omsatielDibe Moone ot fon Mone) Umpene not wonton 3 het Sloe 07 Wena Cape lor secs ghee anc Pek Pt 35 Norte? eared nen Mba 13°F PROB, ea Ses Ma sD et 037 74 | wmstansn | iets NAT_SI_R232020_072022 Final_638694 Page $ of 3494. Number of contracts deemed to be under investigation by the SIU as at 10 December 2021 ‘The number of contracts under investigation reported at 10 December 2021 was 5 467. These contracts were awarded to 3 066 service providers. As a percentage of the number of the contracts under investigation, 82% of these contracts have been finalised and 18% were ongoing. Pr ere Se eee Finalised R13 341 873 576 ‘Ongoing | R967 660 529 Total R14 303 534 105 | Breer DEC ery eae No irregularity R5 313 995 534 “Irregularity identified 4217 2803 T R7 872 752 561 | ‘Out of scope 91 1 | R179 178 026 Total 2621 4549 R13 365 926 121 2. Number of contracts deemed to be under investigation at 30 June 2022 The number of contracts under investigation is § 482. These contracts were awarded to 3 042 service providers. As a percentage of the number of the contracts under investigation, 91% of these contracts have been finalised and 9% are ongoing, Petr ett Renner dg gs P| Een Capra Pa se nn Mt Jas 71D tua ta ton 0 oar rms [Ped Me Dds ee He Gate Stare vm games Saas, Macro Mob 120 | mpeg cM ode 0 Bt 3a Set Pare 07 Nese Cape Fo seco ange a Cal AR Pads 75 eth Ne Oh eae ane Maer Math 3 PID Bd. Sater Set SOD eke 77 | wean | Hloemogss NAT_SI_R232020_072022_Final_638694 Page 6 of 249Final number of contracts under investigation by the SIU at 30 June 2022 Finalised 4977 R15 235 467 648 Ongoing 505 RZ 585 874 635 5482 R17 821 282 484 Note 1 — a number of service providers were listed separately with a number of contracts in the previous reconciliation. There were a number of service providers who were awarded contracts for the same type of PPE so these have now been consolidated Goer een eee ean No irregularity | R6 950 669 931 | Irregularity identified 7306 2954 R8 264 797 717 | Out of scope R8 284 797 717 Total 3045 2s GD. | R16 410 418 781 ratte Set rte Bdg, Mg Pk 8 Est caps a Py an ‘van Kmart nan etl Cab," 0 ery wee nt ot ie akon ei (Clee tau Bete pense 25s berber fo bowel 0 Urpep nao Mosinee eben. Hs Sor enn] Wenn Cet Bec ug Reber akc Pe Peas HES teen Pek eae ar Mate 13°F PBs aber ee Mh SED ete 05077 j wean | bdouag NAT_SI_R232020_072022_Final_638694 Page 7 of 2493. Steps Taken The following outcomes have been achieved to date fror \ception of the investigation: Number of matters enrolled in the Special Tribunal 45 [se Value of matters enrolled in the Special Tribunal R2 101075696 | R2 247 237 256 | Number of referrals made for Disciplinary Action 224 me against officials Number of referrals made to the Relevant 386 408 | Prosecuting Authority | Number of referrals made for Executive Action 3 3 | Number of referrals made for Administrative Action 30 340 (which includes Blacklisting) Rand value of potential cash and/or assets to be R551 542 405 R553 162247 | recovered Rand value of actual cash and/or assets recovered | R34 266 462 R35 776376 | Value of potential loss prevented — 5 ~ R114 203 509 R114 203 509 | Contracts set aside R170 413 350 RIT7 766.450 | rer ny See nent aes oO [Ean Caps Po a en eat aaa re acne Out Cnt Cron, 0 Lr [a Sane 95 eo ares ham ie Eagar Mpa sar Rec En, Mo rit hls Hb 129 nope ca oe cian mig 3 Soe aan O7 We ae ne Of eco alg eer esl a Pans 7S ernest 1a an Oca eae Mons haere Fo, Be er So SoD Hen 0930774 | oss | ban NAT_SI_R232020_072022_ Final_638694 Page 8 of 249.TABLE OF CONTENTS DISTRIBUTION LIST 2 EXECUTIVE SUMMARY 3 1. BACKGROUND TO THE ISSUANCE OF PROCLAMATION R23 of 2020 13 2. SIU’S MANDATE 14 24, KEY OBJECTIVES 14 2.2. KEY DELIVERABLES 15 2.3. INVESTIGATION METHODOLOGY 15 3. REGULATORY FRAMEWORK 16 4 OUTCOMES ACHIEVED TO DATE 27 4.1. CIVIL LITIGATION CASES INSTITUTED 27 4.1.1. Civillitigation cases instituted in the High Court ar 41.2. Civil litigation cases instituted in the Special Tribunal 30 4.2. VALUE OF ORDERS GRANTED IN THE SPECIAL TRIBUNAL 38 43, NUMBER OF REFERRALS MADE FOR DISCIPLINARY ACTION AGAINST | OFFICIALS 4.4. NUMBER OF REFERRALS MADE TO THE RELEVANT PROSECUTING AUTHORITY 152 45. NUMBER OF REFERRALS MADE FOR EXECUTIVE ACTION 192 46. NUMBER OF REFERRALS MADE FOR ADMINISTRATIVE ACTION 195. 47. RAND VALUE OF POTENTIAL CASH AND/OR ASSETS TO BE RECOVERED 239 48. RAND VALUE OF ACTUAL CASH AND/OR ASSETS RECOVERED 250 4.9. RAND VALUE OF POTENTIAL LOSS PREVENTED 253 4.10. RAND VALUE OF CONTRACTS SET ASIDE 255 5. MATTERS FINALISED 256 GAUTENG PROVINCE 256 Gauteng DoH 256 Infrastructure Projects 256 Bas Medxpress CC (‘Bas Medxpress”) [GAU_PRO_089] 287 Laydene Pty Ltd (“Laydene”) 258 aera Snare Bl Mee oe ttn Capea a9 Were ana et "rth Wa oncom Ofek eran hang tat 5° Fa nur, Sue Set ha 00 etn 007 74 | mewcuanas | Woon NAT_SI_R232020_072022_Final_638694 Page 9 of 349EASTERN CAPE PROVINCE 258 Housing Development Agency (“HDA”) 258 NJR Projects (Pty) Ltd (NUR Projects”) 258 Buffalo City Metropolitan Municipality (“CMM”) 261 Vitsha Civils, SQT Construction & Civils and Coalition Trading 261 South African Social Security Agency (“SASSA”) 264 AD Medical and 70 other service providers 264 My Peace Mali Investments (“My Peace”) and Xhobani Cleaning and Security Services (“Xhobani”) 268 Amatola Water Board (“AWB”) 269 Sontinga Consulting Services and two other service providers 269 K2S Construction Afr and seven other service providers 272 FREE STATE PROVINCE 275 Lejweleputswa District Municipality (“Lejweleputswa”) 275 Biomass Equipment (Pty) Ltd (“Biomass”) 25 KWAZULU-NATAL PROVINCE 278 Newcastle Local Municipality (“Newcastle”) 278 Steps Taken 278 MPUMALANGA PROVINCE 280 5.5.1. Nkomazi Local Municipality (“Nkomazi") 280 5.5.1.1. PPE Expenditure 280 5.5.1.2. Water expenditure 282 5.5.2. SAPS 285 5.5.2.1. PPE procurement - no irregularities 285 5.5.2.2. PPE procurement - with irregularities 289 5.5.3. Mpumalanga Regional Training Trust (“MRTT”) 290 5.5.3.1. Deep cleaning 290 5.5.3.2. PPE expenditure 293 56. NORTHERN CAPE PROVINCE 293 5.6.1. Department of Social Development (“NCP DSD”) 294 5.6.11. Various service providers 294 rota Aen et tes ene 9 en en ecard ue St Du nt Da, Oe bey owe na ane een anda ea ee cosa lens te nei, ent om, Mea apap nse Moon 0 aia 3 et se ane 70 Wee ae Pom ner tnd ei Poh eS resco a oro hrous Ora hn ners le; Bude suc et a So etn 00577 | sna | Masiomzn NAT_SI_R232020_072022_Final_638694 Page 10 of 3495.6.2. Northern Cape Department of Roads and Public Works ("NCP DRPW”) 299 Various service providers 299 Northern Cape Department of Health (“NCP DoH”) 300 Macronym 37 (Pty) Ltd (“Macronym”) 300 MKV Investments (Pty) Ltd (“MKV”) 302 DNS Suppliers (Pty) Ltd (“DNS”) 304 Asijiki Soundbytes (Pty) Ltd (“Asijiki”) 306 Revolt Headboy (Pty) Ltd (“Revolt Headboy") 309 C-MED Suppliers CC (“C-MED”) 310 Northern Cape Department of Education (NCP DoE”) 342 Tshela Bophelo Wellness Solutions (“Tshela Bophelo”)] 342 NORTH WEST PROVINCE 313 North West Department of Public Works and Roads (“NWP DPWR) 313 Various service providers 313 North West Department of Community Safety and Transport Management (‘NWP CSTM”) 348 Various service providers 348 Ngaka Modiri Molema District Municipality 320 Various service providers 320 WESTERN CAPE PROVINCE 325 Western Cape Provincial Department of Health (“WCP DoH”) 325 1, Greenstar Power Solutions 325 6 MATTERS ONGOING 327 641. NATIONAL DEPARTMENTS 327 6.1.1, Transnet SOC Limited (“Transnet”) 327 6.1.1.4. Ramoyadi Air Conditioning, and Electrical CC Ndzalo2 Trading (Pty) Ug and Eagle Ropes (Pty) Ltd South African Police Services (“SAPS”) 330 Mainstreet 699 (Pty) Ltd (“Mainstreet 699”) 330 KWAZULU-NATAL PROVINCE 335 ae Noche Poy nf eae ery Mada 13a RO Buln etd ee ha SD ot 02977 | mrsagae | heoevon NAT_SI_R232020_072022_ Final_638694 Page 11 of 349,KwaZulu-Natal Department of Health — Infrastructure (“KZN DoH”) 335 MPUMALANGA PROVINCE 338 Mpumalanga Regional Training Trust ("MRTT”) 338 Schoo! Water and Sanitation Projects 338 Department of Human Settlements (“MPU DHS”) 341 Infrastructure Projects 344 NORTHERN CAPE PROVINCE 343 NCP DSD 343 Various Service Providers 343 NCP DoE 344 Shiroway Projects (Pty) Ltd (“Shireway”) 344 NCP DRPW 345 Various service providers 345 Renosterberg Municipality (“Renosterberg”) 347 Prt ater Starter Mon Po Eta Capra Ste se Vet ab 4 Orne tt etn ata rr, RU To tne en ards ba oe (Gleason pumatngi 2 Sree None on Mob 10 apap ce lc oda 0 alg 31 Set Par 10] Mer pe ia 9s Toy lg ape Na Ponds PS ‘Nerthesot PtsOfePak ae a aer Mtate 13° F RO Bdsiarn St aa 0D ean 208774 | werasuegat | wort NNAT_SI_R232020_072022 Final_638694 Page 12 of 3481. BACKGROUND TO THE ISSUANCE OF PROCLAMATION R23 of 2020 On 15 March 2020, the Minister of Co-operative Governance and Traditional Affairs, as designated under section 3 of the Disaster Management Act, No. 57 of 2002, declared a national state of disaster having recognised that special circumstances exist to warrant the declaration of a national state of disaster. The Minister's decision was informed by consideration of the magnitude and severity of the Covid- 19 outbreak which had been declared a global pandemic by the World Health Organisation and classified as a national disaster by the Head of the (South African) National Disaster Management Centre Emergency procurement measures were subsequently implemented by the National Treasury ('NT’). A brief exposition of such measures is set out in the section of this Report which deals with the regulatory framework that is applicable to the matters under investigation. Pursuant to the declaration of the national state of disaster, the allegations mentioned herein were reported to the SIU. The allegations upon which the SIU's motivation for a proclamation was based emanated from: a) the Director-General ("DG’) in the Office of the Premier (‘OTP"), Gauteng, ») whistle-blowers whose identities are known to the SIU; and °) anonymous whistle-blowers via the SIU whistle-blowing hotline, The allegations involved certain affairs of state institutions in the national, provincial and local spheres of government in relation to the procurement of goods, works or services in response to the Covid-19 pandemic. The allegations reported to the SIU involved the procurement of Personal Protection Equioment ((PPE"), hospital and quarantine sites, catering services (food parcels), ventilators, disinfecting ‘equipment and motorized wheelchairs, twas alleged that- a) suppliers/service providers were paid in the absence of proof of delivery; b) duplicate payments were made to suppliersiservice providers; rat 7 tere Se erent ng Moar Po 8 fen Capea Pe, tm roe ee ‘ae 1 eve buon ee Dun 9 1 Ret Ue es een Mn eon (Clap ue Suerte |tpanatae 2s sont Dhe bonse Crt, hos: Morel 18| pops cdo ecm 0 dg. Soe ln 07 We ape io Talo aang ena anal Po Ponds 88 Nota es Oe a earn bn Mae 3 Bld Samer i Mat SO et 50077 | wmesuerger | Moedurg> NAT_SI_R292020_072022_Final_638694 Page 13 of 349°) suppliers/service providers did not have valid tax clearance certificates or were otherwise not tax compliant; d) PPE were procured at exorbitant prices; and e) officials disqualified legitimate service providers and replaced them with entities belonging to their friends and/or family. In summary, it appeared that the procurement did not comply with section 217(1) of the Constitution of the Republic of South Africa, 1986 ("Constitution") as well as the applicable measures announced by the NT in relation to procurement undertaken by state institutions in response to the Covid-19 pandemic. After careful consideration and assessment of the allegations, the SIU applied to the President for a proclamation to investigate maladministration and corruption regarding procurement by all state institutions across all three tiers of government, in response to the Covi 19 pandemic. 2. ‘SIU'S MANDATE 24. KEY OBJECTIVES ‘The objectives of the investigation are as follows: . Review compliance with the prescribed legislation, policies, procedures, directives and other relevant or applicable prescripts in respect of the procurement of goods and services by the State Institutions in response to the national state of disaster. . Identify irregular/unlawful conduct on the part of the officials or employees of the State or any other person . Collect lawfully admissible evidence to institute civil proceedings to: © set aside contracts awarded by the State Institutions, if appropriate; © recover public money that was not due, owing or payable in respect of the procurement process that was followed by the State Institutions; and/or © prevent further losses to the State. . Refer such evidence for the institution of appropriate disciplinary, administrative, executive and/or criminal proceedings against complicit parties. . Provide recommendations on improvements of systemic weaknesses identified. sana at one Ont ano eon bane cst rd peg annie esi Cate er op Pe toon tan 9 ua Sut aan 07 wen cape Reo wr Blar eget Scat Mende OS Note lne naan fea ean tera MO ale ala ID etn 0087 | sues | owas NAT_SI_R232020_072022_Final_ 638694 Page 14 0f 3492.2. KEY DELIVERABLES ‘The deliverables of the investigation are as follows: . To investigate allegations pertaining to the procurement of goods and or services. . To institute civil proceedings in the Special Tribunal for the recovery of losses andlor the prevention of further losses. . To refer evidence in respect of criminal, administrative, executive and/or disciplinary action, and to make systemic recommendations. . To compile and submit progress Reports and a final Report to the President in respect of the investigation conducted. The key outcomes, which are underpinned by the need to ensure consequence management, may be illustrated as follows: CONSEQUENCE MANAGEMENT SS ieiaceuan ues) 23. INVESTIGATION METHODOLOGY ‘The SIU investigation methodology includes the following} . A review of all legislative prescripts governing the areas under investigation; . The collection of documents utilizing the powers as set out in sections 5 and 6 of the SIU Act; Pett 2 ate Se anneal Nae utr apa Pa ae ene eet aaa htt ayant Data tk D0 ees rnb 85 ein na i Taw Ht {Cn oat len perso ace De nba hr andl 120 unger ee oan bg ha Soe Plan 07 ean Cae Fer pe eso unranked 8S Neher fee Pk Seka iano Pr PD Bldg Shes Set aa 10 etna 000777 | wages | began NAT_SI_R232020_072022_Final_638604 Page 15 of 349,. A review of all applicable documents against the legislative prescripts; . Interviews with keys witnesses, officials and whistle blowers; . ‘Conducting site visit . Obtaining computer forensic evidence through Cyber Forensic; . Conducting Data analytics and searches on available data bases . Quantification of losses for recovery/prevention of future losses through forensic accounting analysis. 3. REGULATORY FRAMEWORK The measures applicable to procurement by State institutions may be divided into two broad categories: . Those applicable to State institutions in general under ‘normal" circumstances. . Those applicable to State institutions when they cannot procure my means of their normal procurement processes, and where they have to procure under the emergency circumstances resulting from the declaration of a national state of disaster on 15 March 2020. Since the declaration of the national state of disaster, the NT has put certain measures in place to further regulate public sector procurement. These additional measures include the issuance of a communication on 25 March 2020 to all Accounting Officers and Accounting Authorities advising that no new tenders be issued during the national lock-down period so as not to deprive a prospective bidder of the opportunity to be able to respond to such tender. The communication, referred to above, was superseded by a further communication dated 5 May 2020, which provided, inter alia, that new bids could be issued during the lock-down period, but that such was required to be done in a manner that ensured that no prospective bidder was deprived of the opportunity to be able to respond to such tender, and without contravening the other lock-down restrictions such as social distancing etc. This was to ensure that public procurement, under the circumstances, remains fair, equitable, transparent, competitive and cost-effective, as required by section 217(1) of the Constitution, ort se porns tng Mees a) ate Cape saan ak 9 tr at oat 14D ne Se Den rin Db et fe er do ares De ie {Calog fh Bonneau Mme Ct nari 128 op a ce Moai St ung eet tn 207 eur Cape Reo pe acs ang aera anda ah nds even, Rts Ota Sean aa agate he MOB Steed Sot SP TO) Hone 000774 | wens | Hgeluanse NAT_SI_R232020_072022_Final_638694 Page 16 of 349Further measures include the issuing of; a) b) °) dq) e) a) Regulation 9 of the Disaster Management Regulations of 18 March 2020 stated that emergency procurement is subject to the Public Finance Management Act, 1999 (Act No. 1 of 1999} ("PFMA’), and the applicable emergency provisions in the Regulations or Instructions made by NT. NT Instruction No. 08 of 2019/2020: Emergency Procurement in response to National State of Disaster ("Practice Note No. 08 of 2019/2020"), which applied from 19 March 2020 to 14 April 2020, Practice Note No. 08 of 2019/2020 was repealed by NT Instruction No. 3 of 2020/21 — see paragraphs (c) and (|) below. NT Instruction No. 3 of 2020/21, dated 15 April 2020 (“Practice Note 3 of 2020/2021") purportedly applied from 15 April 2020 to 27 April 2020. Practice Note 3 of 2020/2021 was repealed by Practice Note No. 5 of 2020/2021 ~ see paragraphs (d) and (m) below. NT Instruction No. 5 of 2020/2021, dated 28 April 2020 (‘Instruction No. 5 of 2020/2021") (as amended and supplemented from time to time) applied from 28 April 2020 to 31 August 2020. Instruction No. 5 of 2020/2021 was repealed by NT Instruction No. 11 of 2020/21 An Amendment to Instruction No. 5 of 2020/2021 “Update of Price List and Supplier List’ dated 20 May 2020 (‘Amendment to Instruction No. 5 of 2020/2021") — see paragraph (o) below. NT Instruction No. 7 of 2020/21 "Preventative measures in response to the Covid-19 pandemic that resulted in the national state of disaster’, dated 26 May 2020 (‘Instruction No. 07 of 2020/2021") applied as from 1 June 2020 — see paragraph (p) below, GNR. 448 of 3 April 2020: Tribunal Rules for Covid-19 Excessive Pricing Complaint Referrals (Government Gazette No. 43205), which were issued by Ebrahim Patel, Minister of Trade, Industry and Competition in consultation with the Chairperson of the Competition Tribunal and in terms of section 27(2) of the Competition Act, 1998 (Act No. 89 of 1998) (“Competition Commission Excessive Pricing Regulations’). In terms of this notice, Regulations were issued relating to the functions of the Competition Tribunal - see paragraph (q) below. tec 8 ey St rte Maes a 3 Cat Cpel a Wn eet ‘rau 4 Pale arme Set Subnet Daan 10 Fa bet esa S95 nd eon Colne Suet |Mouratgh 25 Seni nC ho Na 1p nee oon ig, t's act 75) un ape ea er crag btn apron ts och Wee Phes oss of ert Maen Maa 5° Fn PO Bn, Steen Sot Wh SED 'NAT_SI_R232020_072022 Final_638694 Page 17 of 349h) d k) MFMA Circular No. 100 is dated 19 March 2020 (emergency procurement in response to Covid-19 pandemic) gave directives to Accounting Officers of Municipalities and Municipal entities to facilitate emergency procurement to deal with Covid-99 and to avoid the abuse of the supply chain management system to deal with the Disaster. It applied from 19 March 2020 to 14 April 2020 when it was replaced by MFMA Circular 404 MMA Circular 101 (Covid-19 bulk central procurement strategy for government institutions). Its purpose was to advise municipalities and municipal entities disaster management central emergency procurement process for PPE that may be implemented by accounting officers. It had to be read in conjunction with Circular 100. It states that it updates and replaces circular 100. it applied from 14 April 2020 to 5 May 2020 when it was repealed by MFMA Circular 102. MMA Circular 102. The specific purpose of this Circular is to advise of emergency procurement procedures of Covid-19 PPE items and cloth masks for ease of supply by small, medium and micro enterprises (SMMEs) and create an environment for stimulation of local supply and manufacturing, It applied from 5 May 2020. Itis stated in the circular that it served to withdraw Circulars 100 relating to Emergency Procurement in Response to Covid-19 Pandemic, and MFMA 101 relating to Covid-19 Bulk Central Procurement Strategy for Government Institution. MFMA Circular 103 was signed on 27 May 2020 (Preventative Measures in Response to the Covid-19 pandemic that resulted in the National State of Disaster. It took effect from 1 June 2020. Practice Note No. 08 of 2019/2020 applied from 19 March 2020 to 14 April 2020. In terms of this practice note: NT sought to regulate prices in order to avoid uncompetitive and inflated pricing, including price gouging (see Annexure “A” dated 19 March 2020), Furthermore, the use of transversal contracts (as supplemented by additional PPE related items that were added by NT based on written quotations) for procuring items related to Covid-19 relief measures was prescribed in order to assist with Pre- Porta erage See nee Bsn Mees Pak [fn Capen Fa 9 Nes ee ez 24 ney Ke et Duta CaO 1 yom 9 Ror aac a HE (Clogs sade pumaage 5s Ment toons 18 | nope rn Ra oon ag Ha Se ean 20 ea ape ure By peg RHA ns OE Neth Fc re iP eae en Meng ta Fs HD ul Shean Set a 00 ane 078 | soreuaat | Wlaargae NAT_SI_R232020_072022_F al 638604 Page 18 of 349negotiated prices based on economies of scale; Security of supply; and Preventing rogue and panic buying. . Any items not listed in Annexure A: Table 1 or Table 2 of Practice Note No. 08 of 2019/2020 cannot be procured under the Transversal Contract or the special arrangements made between the NT and the suppliers, in such cases, the State institutions had to: © Apply the normal Supply Chain Management ('SCM") processes, which may include a SCM Deviation under Regulation 16A6.4 of the Treasury Regulations. In this regard, it must be emphasised that the emergency procurement provisions as contained in Regulation 16A6.4, as read with SCM Instruction Note 3 of 2016/17" and NT Practice Note No. 8 of 2007/2008" had to be complied with. © Report to the relevant Treasury within 30 days, any emergency procurement done. . In as far as the State institutions can procure such items or any item listed in Annexure “A under any existing contracts (including Facilities Management Contracts) “in terms of paragraph 8 of SCM Instruction Note 3 of 2016/17, an Accounting Officer “must only deviate from inviting ‘competitive bids in cases of emergency and sole supplier status’. Furthermore, emergency procurement may be invoked “when there isa serious end unexpected situation that poses an immediate risk to health, life, property or environment which cals an agency to action and there is insufficient time to invite competitive bids". n addition, sole source procurement may occur when there is evidence that only one supplier possesses the unique and singularly available capacity to meet the requirements of the institution. The Instfuction Note goes on to provide that the ‘Accounting Officer must invite as many suppliers as possible and select the preferred supplier using the competitive bid committee system. Lastly, any other deviation will be allowed in exceptional cases subject to the prior written approval from the relevant treasury. 2 Practice Note 8 of 2007/2008, issued on 28 November 2007, amplifies Practice Note 6 of 2007/2008 wich was issued ‘on 18 April 2007. Practice Note 6 deals with the procurement of goods and services by means other than through the invitation of competitive bids. It points out the following. First, the deviation permitted under Treasury Regulation 1686.4 is “Intended for cases of emergency where immediate action is necessary or ifthe goods ond services required are produced or available from sole service providers". Second, government institutions have abused it in order to circumvent the required competitive bidding process. Third, lack of proper planning by departments does not constitute @ reason for dispensing with the prescribed bidding processes. Fourth, accounting officers and authorities are accordingly directed to ensure that Treasury Regulation 1646.4 is “utilized strictly to procure goods and services of critical importance and only in specific cases when itis impractical to invite competitive bids.” To ensure compliance, Practice Note 6 henceforth requires accounting officers and authorities to report, within ten days to the relevant Treasury and the Auditor-General, all cases where goods and services above R 1 million were procured in terms of ‘Treasury Regulation 1646.4. The report must include the description of the goods or services, the names of the suppliers, the amounts involved and the reasons for dispensing with the prescribed bidding processes. tec 7 ty Sr nt Big ae Sten Cap: ter oi Yt atin eye Ses Dra ted Dato Pes rea ib ah aso He (Cateye aun arnt Moar: 2 sro Oh. Nobo ow, Mea 120 pep corse osu einer Srr Foan | Wear Cap ans lg any od cla Pens MS Nadel xP eon ao en Fao PD tly te en SED Hee 00074 | waa | Hea NAT_SI_R232020_072022,Final_638694 Page 19 of 349™) ‘© The State institutions or the relevant Treasury is still bound by the terms and conditions of such existing contracts ~ i.e. they can and must still order under such existing contracts. © NT waives the prescripts of Paragraph 9.2 of the NT SCM Instruction Note 3 of 2016/17 “Preventing and Combating abuse in the Supply Chain Management ‘System’, dated 19 April 2016 (“SCM Instruction Note 3 of 2016/17"), © Assuch, the Stale institutions can vary/expand those contracts to a contract value in excess of 15 % of the original contract value or R15 million (whichever is the lesser amount), when purchasing any items related to Covid-19. Furthermore, the State institutions may approach any other supplier to obtain quotes and may procure from any such supplier on condition that © The items are according to the minimum Specifications as determined by the National Department of Health ("DoH"); © The prices are equal to or lower than the prices set out in Annexure © The supplier is registered on the Central Supplier Database ("CSD"). Practice Note No. 08 of 2019/2020 was repealed by NT Instruction No. 3 of 2020/21 ~ see paragraph (m) below. and Practice Note 3 of 2020/2021 purportedly applied from 15 April 2020 to 27 April 2020. In terms of this practice note: As the pandemic impacts both the public and private sectors, it was imperative to collaborate and join forces Thus, a decision for a public and private sector central procurement strategy was made at the National Joint Operations and Intelligence Structure ("NATJOINTS’). The NATJOINTS accepted voluntary support from Business South Africa (‘BSA’) to provide the services of Imperial Health Sciences (‘IHS") as the Central Implementing Agent for the public and private sector to utilise its logistical expertise and capabilities on a non-profit basis. {tis also important that Government sets the maximum price per product it will pay. In the current disaster environment, which is more akin to a war situation with serious shortages and where rationing and price controls may be required. The National DoH and the NT Procurement Team determines the prices that Government will pay for products (revised and updated Annexure *A’). ee rey Serres Bg as ot en Cape hr Pak se me he wae 24 eo SD ata ao 19 er Ly wee at 1 eo rd Ds etm te {Ct ar wt pops Maer Mil em Mr 20 mp na Ft odin star 3 a stv sna 07 esa Cap pry Badge ona Hands HOS Net cfr tn few eam eng Mat Fr PDB, Saba Soe a ID ene 0077 | woman | Meehan NAT_SI_R232020_072022_Final_628694 Page 20 of 349. In terms of Practice Note 3 of 2020/2021, the needs of the State institutions would be submitted to the National DoH and the NT Procurement Team, who will do the forecasts and identify the Net requirement of supplies. The Procurement Team approaches the Solidarity Fund for funding, . A Purchase Requisition from the Procurement Team and approval of funding from the Solidarity Fund is sent fo the IHS as the Central Implementing Agent. The IHS will execute the Purchase Order ("PO") to the Approved SA Suppliers and/or Approved Global Suppliers (i.e. placing the order with such suppliers). . The Approved Suppliers will deliver the goods to the IHS Warehouse, where the IHS will receive and inspect the goods received. . The Solidarity Fund will provide working capital to the IHS ~ who is working on a non- profit basis. . The Approved Suppliers will invoice the IHS and the IHS will make payment of such invoices to the Approved Suppliers. . The goods will be stored, warehoused and distributed (including transport to state institutions) by IHS on a non-profit basis. All incoming stock of PPE items are centrally warehoused at IHS and proper inventory management is maintained. Ordering government institutions will receive products at specified delivery addresses, check goods against the order and sign the ‘Proof of Delivery’ note. . IHS will invoice and recover the cost of the goods (on a non-profit basis) from the State institutions that placed the original Order Requisitions or from the State institutions that received the goods. Such recovered funds must be redeposited with the Solidarity Fund or used as working capital by IHS. . ‘The National DoH and NT Procurement Team will execute bulk procurement orders on behalf of the State from both local and global suppliers. The IHS will only execute orders on instructions from the National Department of Health and NT Procurement Team. . All local suppliers have been invited through a NT Media Statement to provide their details and Covid-19 related health products, based on specifications provided by the National DoH to a centrai e-mail address. tras sey nt rns Dog tye Pa ten Capra es ra ce ‘vane fay asone ec Deb ae Due 010 Ut we Pee 95 oe Mak De ON Shards poaung 5 Suse ie Mee ot thio Nord, 23 |Lmpep enon, p.m Sut lean 89 WetamCape oD el Dlg eget el ek Pd 8 nsf Oro Setar ot eng Mth" ot OM Seton St Ma 10 tine OD Hj wastes | setts 'NAT_SI_R232020_072022 Final_638694 Page 21 of 349. If an item or service is not covered in Practice Note 3 of 2020/2021, and is considered to be a specific requirement for the State institution to combat Covid-19, the emergency procurement prescripts may be followed. . Where a State institution already has a contract (including a Facilities Management Contract) in place, or order placed in terms of Practice Note No, 08 of 2019/2020 for the same items listed in this Treasury Instruction, the State institution must honour these contracts or orders. Contracts may be expanded or varied by up to 15 % of the original contract value or R15 million (whichever is the lesser amount). However, the State institutions must not pay prices in excess of the prices provided for in Annexure ae . State institutions may approach [presumably only if the item or service is not covered by Practice Note 3 of 2020/2021] any other supplier to obtain quotes and may procure from such supplier on condition that © the items are to the specifications as determined by the National DoH; othe prices are equal or lower than the prices in Annexure “A”; and is registered in the CSD. . According to NT: “Mis information about the process, issues of local participation and © the suppli process followed in appointing the private sector service provider, interference by interest parties and negative media publicity made this approach impossible to implement’. . Notwithstanding the statement by NT, as set our above, and the fact that the SIU found no proof of any goods having been procured under Practice Note 3 of 2020/2021 by the Gauteng DoH, the National DoH informed the SIU that: © Practice Note 3 of 2020/2021 was in fact implemented and used by a number of State institutions in other provinces; © IHS and BSA diligently performed quality assurance test via reputable Laboratories and Clinicians in respect of all goods procured by IHS for the State; and © Goods to the value of approximately R1.1 billion were procured by IHS, which was later changed into a donation by BSA, who has or is in the process of refunding all such payments to the State institutions concerned. rer ee Set are Bu, Maye Pat Ge pea a es re ama Pyaar Semel Dra 1 lane om ue ae ee Mane ean ae {Cte tue oct Mea Sr eet ah or Mr |e ov estar 0 ing ah et alr 07 Mew op iw fe lng Rat oda Meda OS arth a ere sek on eng | Meaty 0 alan Serdar 50) etn 00776 | wean | been NNAT_SI_R232020_072022 Final_638694 Page 22 of 349Practice Note 3 of 2020/2021 was repealed by Practice Note No. 5 of 2020/2021, see paragraph (n) below. Instruction No. 5 of 2020/2021 (as amended and supplemented from time to time) applied from 28 April 2020 to 31 August 2020. In terms of this practice note The State institutions must comply with the normal procurement prescripts. However, Covid-19 will qualify as ‘emergency’ and procurement may be done in terms of a SCM Deviation as envisaged in Regulation 16A6.4 of the Treasury Regulations © Alllthe prescripts applicable to SCM Deviations must be complied with, including reporting within 0 working days any purchases above R1 million (Inclusive of VAT) to the relevant Treasury and the Auditor General of South Africa (‘AGSA’). © SCM Deviations do not require prior approval by the relevant Treasury. Extension of downstream contract price variations: Previous threshold of 15 % of the original contract value or R15 million (whichever is the lesser amount) may be increased for the nationat state of disaster to 25% of the original contract value or R25 million (whichever is the lesser amount), but only in respect of goods or services relevant to the national state of disaster. Any contract variations or increases above these thresholds may only be done with the prior written approval of the relevant Treasury. During the national state of disaster, the supply of PPE items will be open to all suppliers, who can deliver PPE to the specification level NT has prescribed! © Minimum specifications for PPE goods and cloth masks. The Specifications for the PPE are set out in Annexure “B” to Instruction No. 5 of 2020/2021; and © Maximum prices per item for PPE goods and cloth masks, as set out in an updated and revised Annexure “A” to Instruction No. 5 of 2020/2021 Paragraph 4.6 of Instruction No. 5 of 2020/2021 states that the State institutions may approach any supplier to obtain quotes and may procure from any such supplier on condition that: © The items are according to the minimum Specifications (i.e. those of Annexure “B® to Instruction No. 5 of 2020/2021); rr 7 erg Set Reet Hopes a | Cpe Sn Pi son re Vee ‘vant eave Set Sura at urn 01 1 Far Ley ees es se andl i kon (Clee gure Bann Mowage 2 Serie banner Sn Mbt 120] Unpapr er Fo odin 29 hk Sven Ror 27 Wea ape Fa yoy aig gy ead a Pk Pde 7S Neti fea Searing Matar Fen PD Bg Sean Sot SED Hane 50774 | mesa | woesiones 'NAT_SI_R232020_072022_ Final_638694 Page 23 of 349© The prices are equal to or lower than the maximum prices prescribed by Annexure “A” to Instruction No. 5 of 2020/2021; and © The supplier is registered on the CSD or any other database approved by NT. © “For the cloth masks, only suppliers that are registered with the Department of ‘Small Business Development and are registered on CSD will be considered. The details of these suppliers will be updated and published on the NT Website on a weekly basis” [Emphasis added]. This requirement seemed to have applied until 20 May 2020, when registration on the Small Business Development database was removed as a requirement, because their prices were higher than what was available in the market . If a State institution or the relevant Treasury has any existing contracts (including Facilities Management contracts) in place for the supply of PPE items, as listed in ‘Annexure “A” to Instruction No. 5 of 2020/2021, then the State institution or the relevant Treasury is still bound by the terms and conditions of such existing contracts — i.e. they can and must still order under such existing contracts. © However, the State institution or relevant Treasury may not pay any price higher than the maximum price, as prescribed by Annexure “A to Instruction No. 5 of 2020/2021 — except for an allowed deviation of 10 % more than the maximum price prescribed in Annexure “A” (but obviously only if the contract price is higher than that prescribed by Annexure “A’), © In addition, the increase to variations to the existing contact value would most probably also be allowed to the 25 % or R 25 million (whichever is the lesser amount). . The State institutions may order PPE and other items provided for under any existing Transversal contracts that were arranged by NT or the relevant Treasury, even where the State institutions have not yet received permission to participate in such ‘Transversal contracts. © Furthermore, even where the State institutions are already participating in a Transversal contract, the State institutions are not bound only to order PPE from under such a Transversal contract, but the State institutions can also procure PPE by other procurement means (this would normally not have been allowed). rer erp St rene Mee Pa arn Capri a9 Ys a a vase Date Set Iron it Deer Fe Lire esa 35 es ada he hon ese (Cang. rm pul 25 Sor mn ore, fo Mar 29) npc Po ‘esi 0 uae 2 ohne sen 7 ese oper en fs eco lng peer ak ca Pek td 7S Neti a esa oa ad lag as Fa Daeg Shard Soe a 10 Henn 08774 | wasn | Hagen NAT_SI_R232020_072022 Final_638694 Page 24 of 349°) p) © However, the State institutions may not pay any price higher than the maximum price, as prescribed by Annexure “A” to Instruction No. 5 of 2020/2021, except for an allowed deviation of 10% more than the maximum price prescribed in Annexure “A”, but obviously only if the contract price is higher than that prescribed by Annexure “A” Instruction No. 5 of 2020/2021 was repealed by NT Instruction No. 11 of 2020/21 with effect from 1 September 2020, but only in respect of new Letters of Commitment or Purchase Orders (POs) placed - old Letters of Commitment or POs must be processed under then applicable Practice note(s). ‘An Amendment to Instruction No. 5 of 2020/2021 “Update of Price List and Supplier List’ dated 20 May 2020. As from 20 May 2020, NT: Issued an updated or revised fixed maximum price list for all PPE (Annexure “A* to Amended Instruction No. 5 of 2020/2021); and Issued a directive of the required Local Contents (in terms of NT Instruction dated 16 July 2012) in respect of a number of PPE — most of which required 100 % Local content, while Furniture, beds and mattresses required 90 % Local content. Instruction No. 07 of 2020/2021 applies as from 1 June 2020. In terms of this practice note: Emergency requirements may be addressed through the emergency procurement provisions as stipulated in Regulation 16A6.4 of the Treasury Regulations and NT Instruction 3 of 2016/17 and Instruction No. 07 of 2020/2021 reiterated the contents of Instruction No. § of 2020/2021 © Accounting Officer must only deviate from inviting competitive bids in cases of emergency and sole supplier status. These deviations do not require the approval of the relevant treasury. © Emergency procurement may occur when there is: + aserious and unexpected situation that poses an immediate risk to health, life, property or environment; and + insufficient time to invite competitive bids. Pec ee Soe ran Buns Mee a 13 aa apa Pa 5 Ye ree nat 26 ae Dtan il Ee 0 et Tes Fah 95 ec Di etm Me {Clee Soave Berton Momsen arco Dob Cn she Moomba 120| pep cah ee von Btn 3 Sees aro 7 Woe en josey Ba Rapa Renal Pek ns 85 Neher fin eo ena PD Bldg sn a ICD Heine LENT | waar | apt NAT_SI_R232020_072022_Final_638694 Page 25 of 349,a) The emergency procurement provisions provide for Accounting Officer to procure the required goods or services by other means, such as price quotations or negotiations in accordance with Regulation 16A6.4 of the Treasury Regulations. The reasons must be recorded and approved by the Accounting Officer or his/her delegate. © Paragraph 3.4.3 of NT Practice Note No. 8 of 2007/08, requires Accounting Officer to report within 10 working days to the relevant treasury and the AGSA all cases where goods and services above the value of R1 million (VAT inclusive) were procured in terms of Regulation 16A6.4 of the Treasury Regulations. ted to goods, services and works that © Emergency procurement must be i addresses the programme of preventing the spread of the Covid-19 virus. © Accounting Officer must ensure that audit of emergency transactions is made a priority to provide assurance on the value for money spent during emergency operations and to identify actions to strengthen controls in emergency transactions. Competition Commission Excessive Pricing Regulations applies during the national state of disaster. In terms of these Regulations: The purpose of these Regulations is to provide for Competition Tribunal rules regulating complaint referrals for alleged contraventions of section 8(1)a) of the Competition Commission Act, as read with Regulation 4 of the Customer Protection Reguiations, the National Disaster Management Regulations and the relevant Directions, during the period of the dectaration of a National State of Disaster in respect of Covid-19. Regulation 3 states that “...Subject to subrule 3.4, these Rules shall be of no force or effect when the Covid-19 outbreak is declared to no longer be a national disaster. Unless the Tribunal directs otherwise, these Rules will apply to any complaint referral that has commenced before the Covid-19 outbreak is declared to no longer be a national disaster’ Regulation 5 states, inter alia that “A complaint referral for an alleged contravention of section 8(1)(a) of the Act read with Regulation 4 of the Consumer Protection Regulations may be dealt with by the Tribunal on an urgent basis. ... A respondent who wishes to oppose the Complaint Referral must serve a copy of their Answering Affidavit Pt ery tt an Bung Moro Poo Sey apa Pa 9 eae usar een et btn CnC To Ube ers ne Reo Hane Die Tta ae (Cones et pag sana ei, hen are ar Nowe paps cos Fe Moin 0 mag 3 ut st lane 7 en ae Fn ee aig gen dco Prd HS ota For rae Fence nog] te Dal nd et ati ST ee 00774 | esas | lems NAT_SI_R232020_072022_ Final_638694 Page 26 of 349on the Complainant within 72 hours of service of the Complaint Referral. The person who filed the Complaint Referral may serve a copy of their Reply within 24 hours after being served a copy of the Answering Affidavit. The Tribunal shall determine the date and time for the hearing of the complaint referral ..." Regulation 8 states that “The Tribunal may, inter alia, impose a pricing order on a respondent found to have contravened section 8(1)(a) of the Act. A respondent may apply to appeal or review such a pricing order on an urgent basis to the Competition Appeal Court provided that the pricing order will remain in force unless set aside by the court on appeal or review’. Regulation 8 states that “The Commission may any time before, during or after an investigation, conclude a consent agreement with a firm in respect of a complaint under 's 8 (1) (a) in full and final settlement of the matter, including settlement of any civil proceedings. The Tribunal may confirm such @ consent agreement without hearing any evidence’. The Competition Tribunal has imposed significant fines on any suppliers or retailers who sold PPE related goods at excessive prices during the national state of disaster. In one instance a supplier was ordered to pay one and a half times its excessive profit a8 a fine to the National Revenue Fund. Currently, the Competition Commission deems a profit of 30% as a reasonable profit margin, and any profit in excess thereof is deemed to be prima facie excessive, where the supplier or retailer must then prove that its expenditure during the national disaster increased to warrant any such price increases. The SIU's investigation is thus focused on testing procurement by State institutions after the declaration of the national state of disaster against the regulatory framework mentioned above. 4A. 41d. 444A, OUTCOMES ACHIEVED TO DATE CIVIL LITIGATION CASES INSTITUTED Civil litigation cases instituted in the High Court On 23 October 2020, the Dr BEW Masuku, the former MEC of Gauteng Provincial Department of Health (‘Gauteng DoH") ('MEC’) filed an urgent application in the High Court of South Africa (Gauteng Division, Pretoria) under Case No. 55372/2020 to tr 2 tery St rz ae Po 083 tr Cpa Pik SP ase Re ans inate ant. ta 1 Re ay or fe Steen ana De Who ese {Cony nae atone puna: iace hw are enone Marta 209| Unpaper crt cian 9 tng 3h So ele 7 Wea ape oy seo ln tenga Pu Pes 5 Neth ona Oe eh eee art Mr a3 PRO Bn ead Se Mar TD 0077 | wma | Wot NAT_SI_R232020_072022_Final_638694 Page 27 of 349444.2. 44.1.3, review and set aside the SIU referrals as being unlawful, unconstitutional and therefore invalid. The SIU opposed the application. The matter was set down for hearing on 21 January 2021 before the full bench of the High Court. On 21 January 2021, Sutherland ADJP, Raulinga J and Siwendu J presided over the hearing of the application that was brought by the former MEC, and judgment was reserved. The court on 12 April 2021 handed down judgment and dismissed Dr Masuku's application to review and set aside the SIU referrals with costs. Impact: The court confirmed that SIU reports and or recommendations are subject to legality review. The Executive Authority can be held accountable for dereliction of duties. On 27 November 2020 the SIU instituted proceedings against the Matzikama Municipality in the Western Cape High Court under Case no WC 1797/20. The matter involves bid manipulation and leaked bid information, resuiting in an unlawful procurement process. The Municipality irregularly concluded a contract with Rural Impact Training Centre to the value of R650 378 and the matter also involves the Municipal Manager. The SIU applied to court to have the contract set aside and recover losses suffered. The respondent filed its opposing affidavit and the SIU its replication. on 13 August 2021. The matter is set down for hearing on 3 February 2022 Proceedings were instituted in the Port Elizabeth High Court under case number ECP. 2807/2020 by HT Paletona Projects against the Nelson Mandela Bay Metropolitan Municipality. The evidence obtained by the SIU reveals that the Municipality irregularly and unlawfully contracted with Pelatona to construct toilets to the value of R24 million. It is alleged that the service provider was appointed on the basis of a sole service provider under circumstances where this was not justified. Pelatona issued summons against the Municipality for payment in the amount of R4.3 million. The SIU through its investigation found that the amount claimed is not due and owing. The SIU is seeking to join the legal proceedings instituted in the h Court against the Municipality by Peon ema Ses reer fing Ne Fao tty ape iam Pak. vem em Yc sey 4 ray axes ban aD 1 ery os |e 5 ei ere ABS Calor a Sn pura? Sn he Me atl an Mori 8 np on Ran. tadoan tng 3 See ares 07 esa ap nn seco Bag Rene ocak Pande HOE Norther tn Oe Stme en en Maa Fk PD aS Set a 100 ae 200074 {wnsionse | Moers NAT_SI_R232020_072022_Final_628694 Page 28 of 349Pelatona. The parties exchanged pleadings and an application was set down for hearing on 19 August 2021. Judgement was reserved. 4.1.4.4, Digital Vibes - In this matter Dr Mkhize served issued a review application under case 52006/21 out of the Guateng Division. Pleadings have been exchanged and the SIU has undertaken to comply with the R53 notice on 30 June 2022 4.4.4.8. Sibiya - In this matter issued Application against the SIU for defamation in the Gauteng Division- case no: 63973/2021. The cause of action is based on the content of the SIU report. The pleadings are closed and parties awaiting directive from court regarding the hearing matter. Ptr ate Rens De Het ter apse Yn ne ei siti Pe cet Dus al Dat 0 10 Ft ber wes ese 95 he nal ie Wo OU Geog Sno er dorn Mpa 2 Semen, Mbonbe t shilou Moab, 10 Ungaper coda ota dg, 1 het eet, 278s aes ara ale aperhRnd a Ped Neth Mots fea Sean sen tata 1 Pear WO Ba ard Soe hn SD Heine 9000774 | wonetuonse | haphion= NAT_SI_R232020_072022_Final_638694 Page 29 of 34967610 0F Beg 69859 PULA 2z02L0 Oz0zEzY IS LYN sctimpanys | webrpan | peeve mae stung ans poe Hp yA ENON EHH PU SHNES LEO AL Ma NIN soc peo no pot ogra pea se ek EP Umea em =e YL HPN SU “ecu ora eau 9 Secon a oan eeaoaay iN HeAM suse adem aco ats. ena PIN rn me Ne Tey RD Yd a se LH a PON "meus memes as Boma Ld Wee nese yn adeg welse3 oy) poyoIpioqu! pue yeWJUO9 oy opise 308 Jeunqul leeds oy LzOz/POIzz YO “LZOz/POIZZ uO PiBOY sem JeyeW ey} pue jeunqus jeIeds ‘OU} Ul PeINWSU] USEq ereY SBulpesooid MeINeY OU “ypenuoo Buginses pue pieme 2a00d malnay JO up Jo Aupiien eu ebue)je4 0 $6 uonesyeuy aiy Bulpuad ‘sayiddns 24) wo. spoo6 Aue Jo Auenijap Guydeode wioy pue sayiddns ayy 0} sjuswied Aue Bunjew woy payorpieyul sem Hog edeg wayse3 uy pue Jeungu! 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