The DA in Limpopo calls on Public Works, Roads and Infrastructure MEC, Ernest Rachoene, to urgently arrest the Roads Agency Limpopo’s (RAL) out of control irregular expenditure and non-compliance with legislation.
The entity’s irregular expenditure increased from R6,850 billion at the beginning of the 2023/24 financial year to R8,670 billion at the end of March 2024. The main contributors to this massive irregular expenditure:
- Irregular appointment of service providers as there was no clear criteria for appointment of service providers
- Irregular appointment of service providers as proper SCM processes were not followed in the prior years
- Projects not budgeted for in the prior years
RAL also has serious Supply Chain Management (SCM) issues. The entity seemingly established a Contractor Panel where a small pool of prequalified contractors were approved to take on road capital projects. The panel is not in accordance with the SCM legislation in the Public Finance Management Act and during one year, RAL incurred R1,6 billion in irregular expenditure due to appointing contractors through this panel that pre-qualified contractors.
RAL used this select list of contractors and there was also no clear criteria for appointment of service providers from the panel. According to the Auditor General, some of the construction contracts were awarded to contractors that did not qualify for the contract in accordance with section 18(1) of the CIDB Act and Construction Industry Development Board Regulations 17 and/or 25(7A).
The decision to only award contracts to a very short list of pre-selected contractors is highly irregular and is exclusionary to other contractors that were not part of this select group. RAL’s tenuous argument in the past for the establishment of this panel was that it was to ensure that the period to appoint contractors is shortened.
The DA will ask written questions in the Limpopo Legislature to ascertain the criteria for the selection of these contractors, obtain a list of these contractors and how many contracts were “allocated” to each of these contractors and the process used to determine which contractor on the preferred contractor list was used.
The DA will not allow this massive irregular expenditure to continue and will hold RAL as well as the MEC to account.