PAC UNCOVERS DURING VISIT TO SA COMPANY: ESWATINI LOSES E15M IN FIRE TRUCK DEAL

LOBAMBA – Gone down the drain!

The Public Accounts Committee (PAC) has uncovered that E15 million that was paid to a South African company for a fully-equipped firefighting truck has gone down the drain. The money, which was donated by the Republic of China (Taiwan), to procure a fully-equipped fire engine, was apparently taken by one of the two directors of the manufacturing company, after a falling-out with his co-director.

This was revealed by PAC Vice Chairman and Nhlambeni Member of Parliament Manzi Zwane when unpacking the progress report on the truck, in Parliament yesterday. The PAC, together with some officials from both the Ministry of Housing and Urban Development and the Ministry of Public Works and Transport, went to the Republic of South Africa, Pretoria, where the company is based, to follow up on the progress of manufacturing the specialised truck as directed by the PAC.

Purchased

This, after the Auditor General, Timothy Matsebula, in his Financial Audit Report for the 2023 financial year, reported that the Fire Department purchased a vehicle in 2021, but it was still not delivered three years later, despite being fully paid for. The PAC then commissioned an inspection on site where the vehicle was to be manufactured, in line with Section 129 (5) (c) of the Constitution of Eswatini. The site visit was intended to assist the PAC to make an informed recommendation on the matter.  The inspection-in-loco was conducted on October 24, 2024, as revealed by Zwane.

When unpacking what they discovered during the site visit, Zwane detailed that they were informed that the two directors had a falling-out and one of them eventually pulled out from the company, and at the time, the country had already made a commitment in terms of a contract and the money had been availed to the company through a government bond. He narrated that it came to the point that liquidating the company was an option, but the other director did not want to take that route. Zwane explained that they uncovered that the E15 million was deposited into the private or personal account of the director and he left South Africa for Australia. “However, they did acknowledge that Eswatini was owed and they even showed us some of the parts they had assembled for the manufacture of the truck,” he explained.

Manufacturing

Zwane then shared that the manufacturing of the specialised truck was supposed to be finished at the end of the current month, but the manufacturers requested an extension until January next year. “Seeing that in December, most manufacturing companies take a break, we saw it fit to give them an extension until the end of March next year,” he said. Zwane further detailed that they requested the company to then commit in writing, so that they could be liable when they fail to deliver as per the commitment. However, the legislator revealed that to the present day, the company has not done so and it emerged that both the Ministry of Housing and Urban Development and the Ministry of Public Works and Transport did not follow up on the matter.

However, the ministries made a commitment to follow up on the matter and get a written commitment from the company. PAC Clerk at Table Arthur Mordant gave further clarity that the company did admit that they do not have the money anymore, but there was no guarantee that they would deliver the truck as they were seemingly carrying out the manufacture of the fire engine out of the goodness of their hearts and to save the relationship that they have with the country in terms of doing business. Mordant said there were two issues regarding the matter, one being a question of how the money landed in the personal bank account of the departed director when there is a company account.

“The other one is how come the procuring ministry did not notice and acted promptly when the government bond was nearing its expiration date, because as it is, the bond has expired and the country has lost the money when it could have gone to the bank to claim it since the client had not delivered as per the contract,” he said. A government bond is a debt security issued by a government to support spending and obligations. Government bonds pay bondholders periodic interest payments called coupon payments. Member of the committee and Gege MP Magesi Dlamini, said they also found out that it was not just Eswatini the company was doing business with, but many others. However, he did say that it was the Kingdom of Eswatini that was disadvantaged.

Acknowledge

Giving clarity on some of the submissions of the committee members, Ministry of Housing and Urban Development Principal Secretary Simon Zwane, did acknowledge that something was not right in the procurement process.  He said from a procurement perspective, they do require a bond and in this instance, it was issued. However, he revealed that the bond expired without the procuring ministry acting promptly in terms of going to the bank and transferring the risk to the manufacturer.

PAC Chairman and Mhlangatane MP Madala Mhlanga wanted to know if there were any other dealings the country had with the manufacturing company and he also wanted to know what plan B the country has if the company does not deliver as they promised.  Matsanjeni South MP Sabelo Ndlangamandla wanted to know if the pre-payment model was the one used by the procuring ministry in all its business dealings with the company. Central Transport Administration (CTA) General Transport Manager Mduduzi Lukhele revealed that they did have dealings with the company, as some of the National Fire, Rescue and Emergency Services vehicles were procured from them.  However, he clarified that there are no pending orders, as the last procurement or business dealing was the E15 million specialised truck.  

Clarity was not given in some of the questions as the ministries involved requested to get further clarity and give a report to the PAC on Monday.  The PAC did not object to the request of the ministries. While conducting the inspection in loco, the MPs and officials were taken to a well known garage in the neighbouring country where they were shown some of the equipment for the manufacturing of the specialised truck including its head. They were told that the truck will be assembled in bits and pieces, depending on the availability of funds. However, the feeling from the members of the committee was that the company was acting as though it was doing Eswatini a favour yet it had the obligation to deliver as per the contract the two parties had.

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