How not to blow R756 million

An alleged Department of Communications (DoC) Digital TV publicity and advertising tender worth R756 million is making headlines again after the Special Investigation Unit (SIU) has raided the offices of the DoC and seized computers in its probe of the tender.

In a related development, whistle-blower Wisani Ngobeni lost a legal battle to get whistle-blower protection to stop disciplinary against him.

The legal papers related to the Ngobeni reveal more about the case. Ngobeni made the following allegations in his legal battle:

  • A copy of the contract between the DoC and Media Corner showed that Media Corner had proposed an advertising expenditure of R756 million over a period of three years.
  • The proposed expenditure was accepted and approved by DoC DG Rosey Sekese despite the fact that the department did not have the budget to meet the proposed expenditure.
  • The contract showed that Media Corner was not doing any work for the department but was presenting invoices for payment which deputy director general Sam Vilakazi was authorising for payment and which the department had duly paid.
  • Media Corner was billing the department a monthly retainer of R983,335.67 without any billable activities.
  • This amount emanated from the contractual provision in terms of which Media Corner was to be paid an annual retainer fee of R11.8 million inclusive of VAT.
  • Of the R34 million already paid to Media Corner, about R6.8 million was paid specifically for the retainer, and he had come to the conclusion that there existed misconduct and irregular dealings between Vilakazi and Sekese, as well as Media Corner.

Ngobeni said that he had made a protected disclosure to members of the SIU in regard to Sekese’s dealings with Media Corner on 16 January 2014. The disclosures he had made to the SIU included:

  • Between October 2012 and November 2013, Media Corner had submitted a total of 15 invoices with an amount totalling in excess of R60.9 million. These invoices were irregularly authorised for payment by Vilakazi and paid by the Department.
  • Expenditure control statement showed that for the current financial year starting from 1 April 2013 to 22 January 2014, a total amount of R40.7 million was paid to Media Corner in respect of the Digital Migration awareness campaign.
  • There is an over-expenditure of more than R6 million in the Chief Directorate even before the financial year ended in March 2014.
  • R60 million was belatedly allocated as total budget to the Chief Directorate for the awareness campaign, and only R17 million was remaining for that campaign, which has since been ring-fenced for that campaign.
  • Vilakazi and his personal assistant have facilitated the irregular payment by authorizing the issuing of a series of purchase orders.
  • Sekese had signed a number of contracts with Media Corner and its sister company, Bagport South Africa, including the “Digital Migration Awareness contract” which did not go through a proper bidding process;
  • The “Talk Show” contract with Media Corner on 28 March 2012 for an amount of R9.5 million without following tender procedures.
  • “Airport Advertising” contract signed by Sekese on 15 March 2012 worth over R1 million with Bagport SA without following tender process.

Media Corner responds

Media Corner was asked why R756 million was needed for this project, and what they were planning to do with the money. The company provided the following response.

Media Corner acknowledges the media interest in the SIU investigation and is fully supportive and respectful of the process that is currently underway. It has expressed its willingness to co-operate with the SIU as required, but has not been approached as yet and believes it is premature to comment at this point.

The contract between Media Corner and Department of Communications is governed by a Non-Disclosure Agreement which prohibits it from discussing the specifics thereof. These queries should be directed to the relevant parties within the Department of Communications.

Media Corner can however, confirm that it responded to the advertised tender for a fully inclusive, 360 degree campaign to drive awareness around the digital terrestrial television (DTT) programme. It followed all due processes, as outlined in the tender documents and believes it was awarded the contract on the creative and strategic strength and comprehensive nature of its submission.

The Department of Communications also did not provide comment regarding this issue.

Why is millions of rands spent on marketing?

The SIU investigation is likely to show whether there was any wrongdoing from the role-players.

However, the bigger question may be why so much money was allegedly earmarked for advertising and publicity regarding digital TV.

To show exactly how much R756 million is, the following list shows what could be done with the money.

R756 million
R756 million

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How not to blow R756 million