Tag: office chairs

Source: The Citizen 

R1 666 to rent an office chair for a month may seem a bit steep, but that’s exactly what the bankrupt state insurer is charging.

Are you sitting down for this?

The Road Accident Fund has pushed through a contract for the rental of 300 office chairs for almost half a million rand a month, in what amounts to R1 666 per chair, the Sunday Times has reported.

Another furniture contract with the same company, Gxakwes Projects, for R60-million, did not go ahead. Both contracts did not have a tendering process.

The fund is technically insolvent, with contingent liabilities totalling almost R190 billion, hence its attempts to make money by renting out office furniture.

The RAF takes R1.93 of every litre of South African petrol sold.

This has not helped them avoid a R34.7-million loss last year.

While the fund admits that renting furniture was “not the best option”, they say they need to do so “to settle claims immediately, resulting in a creditors book of about R8 billion.”

Transport Minister Blade Nzimande dissolved the fund’s board this week, declaring it dysfunctional and affected by “serious divisions”.

Gxakwes Projects, the company involved in the furniture contracts, has been red flagged by the National Treasury after a similar deal was entered into with Eskom, who wanted R24 million for the purchase of 9 217 chairs.

An inspection by the Treasury found that only 500 chairs were needed.

The attempt to secure a five year, R60-million contract without a tender was thwarted by some board members concerned that the “process is fraught with legal concerns.”

Reports of the goings on at the struggling state insurer are a bit like a car crash. As horrific as it is, you can’t look away.

State power utility Eskom wants Treasury to approve a R24-million contract to purchase 9 217 office chairs, the Sunday Times reported.

The request for thousands of “operator and visitor chairs” follows an even bigger contract for office and soft chairs was signed in 2013 for R72.7 million.

According to the paper, Treasury conducted an inspection of Eskom’s offices, and found that only 500 chairs were required, and not the requested 9,200.

Eskom said its request for the R24 million expansion to the current office furniture contract was due to an “urgent need for replacement chairs while initiating a tender process”, however, a Treasury source told the Sunday Times: “The application just looked wrong and we suspected collusion between Eskom and the service provider.”

Debt and corruption scandals at Eskom make the utility the biggest risk to South Africa’s economy and the government needs to replace its management, Goldman Sachs Group said recently.

Eskom plans to raise almost R340 billion ($26 billion) in the next five years, while meeting R413 billion of interest and debt repayments, which amount to 8% of South Africa’s gross domestic product.

The utility is caught up in allegations of corruption related to contracts it signed with companies linked to the Gupta family, who are friends of president Jacob Zuma. It’s also without a permanent chief executive officer and has suspended its finance director. Zuma and the Guptas deny any wrongdoing.

Source: BusinessTech

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