The Special Investigating Unit (SIU) has moved to enforce a January judgment of the Supreme Court of Appeal (SCA) that shuts the door on contractors’ attempts to keep profits from the dodgy R40-million Beitbridge border fence project, signalling a fresh push to recover public money lost through irregular Covid-19 procurement.
Although the ruling was handed down last month, the SIU on Friday publicly outlined its implications and confirmed that consequence management processes are now being activated to ensure implementation.
Rule of law vindicated
Spokesperson Kaizer Kganyago said the judgment “vindicates the rule of law and protects public funds from unjust enrichment”.
“This judgment reinforces the SIU’s mandate to ensure consequence management and accountability in public procurement,” Kganyago said.
The case relates to unlawful contracts worth about R40-million awarded in March 2020 to Caledon River Properties (Pty) Ltd trading as Magwa Construction and Profteam CC by the National Department of Public Works and Infrastructure. This was for the construction of a 40km razor-mesh fence along the South Africa–Zimbabwe border at Beitbridge during the Covid-19 National State of Disaster.
The contracts were awarded without a competitive bidding process, in violation of section 217 of the Constitution and Treasury Regulations. The contractors received advance payments of approximately R21.8-million before substantial work was done. And the fence later drew national outrage after sections collapsed soon after completion.
Kganyago said the SCA had confirmed that “no party should profit from unlawful conduct”.
No profits for implicated contractors
“The court upheld the principle that contractors who were active participants in irregular processes must be denied profit,” he said.
In July 2020, President Cyril Ramaphosa authorised the SIU, through Proclamation R23 of 2020, to investigate Covid-19 procurement. The SIU’s probe exposed procurement irregularities and resulted in litigation before the Special Tribunal.
In March 2022, the Tribunal declared the contracts constitutionally invalid. And it ordered that the contractors be stripped of profits, limiting recovery to reasonable and proven expenses. The High Court in December 2023 dismissed the contractors’ appeal and confirmed the Tribunal’s order.
The SCA refused special leave to appeal in April 2024. In January 2026, it dismissed a further reconsideration application under section 17(2)(f) of the Superior Courts Act. Thus effectively exhausting the contractors’ options at that court.
Kganyago said the latest development “closes the door on any further appeal at the SCA”.
Contractors given 30 days deadline
“The order 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,” he said.
In terms of the order, the contractors must file audited statements and a debatement of accounts within 30 days.
Thereafter, the SIU and Public Works Department must appoint experts to assess the reasonableness of the expenses. And any profits identified must be repaid to the department.
