Department never put it out to tender.

A R90 million contract between an American-owned and operated company and the Western Cape Department of Transport and Public Works to provide “operational public transport” during the 2010 World Cup is being probed.

The Auditor-General’s investigation follows one conducted by the Western Cape provincial treasury, which was ordered by former premier Lynne Brown’s office when she took over from Ebrahim Rasool in July last year.

The treasury found that there were “procedural deficiencies” in the department’s supply-chain management processes, Brown said last night.

The treasury investigated why the contract, awarded to Games Transportation Systems Services (GTSS), was never put out to tender and also what steps were taken to ensure that there were no South African companies able to deliver the required services.

According to documents in the possession of The Star, the contract was approved only by the head of department, Thami Manyathi, on August 27, 2008, although earlier documents show that the company was contracted by the department to start work in December 2007.

By the time Manyathi signed the contract, R23.7 million had already been paid to GTSS.

The contract makes allowance for its total value, R91 million, to double on approval by Manyathi. In addition, GTSS was given free office space, phones, computers, and office equipment and supplies, as well as 27 parking spaces for staff.

According to a document authored by Richard Hutton, the department’s acting project director for the 2010 World Cup, on August 20, 2008 and signed by Manyathi a week later, there was “a lack of major international operational event transportation management expertise available locally”.

This was given as the reason why GTSS should be awarded the contract without any tender process being implemented.

Brown confirmed last night that she had asked the provincial treasury “to conduct a preliminary investigation into supply-chain management processes followed by the Department of Transport and Public Works”.

She said the matter had now been referred to the Auditor-General “for a comprehensive forensic audit”.

By last night, Manyathi had not responded to The Star’s questions and could not be reached.

PUBLICATION: The Star
AUTHOR: NATASHA JOSEPH and RAYMOND JOSEPH
DATED: 8th May 2009