SIU Recovers R25m from Gauteng Education COVID-19 Contractors

Posted 21 May 2026 Written by Acts Online
Category Government Procurement & Tender Law

Brought to you by SAnews: The Special Investigating Unit (SIU) has secured settlement agreements totaling R25 million from contractors unlawfully awarded decontamination tenders by the Gauteng Department of Education.

The settlements follow a 2022 ruling by the Special Tribunal, established under the Special Investigating Units and Special Tribunals Act, No. 74 of 1996, which reviewed and set aside contracts worth R431 million for the decontamination, disinfection, and sanitisation of schools. Under the terms of the newly concluded agreements, 16 service providers and individuals associated with Chachulani Group Investment Holdings (Pty) Ltd have consented to having preserved funds debited from their bank accounts. Financial institutions are required to transfer these funds to the SIU within seven days of the Tribunal granting the order.

Procurement Irregularities and Constitutional Non-Compliance

The SIU’s investigation, mandated by Proclamation R23 of 2020, revealed that the Gauteng Department of Education (GDE) bypassed standard Supply Chain Management (SCM) processes during the COVID-19 National State of Disaster. Instead of utilizing formal SCM channels to source and vet suppliers, officials sourced contractors informally through existing databases, personal referrals, and WhatsApp messages.

Furthermore, the investigation established that the procurement failed to meet the cost-effectiveness requirements of Section 217 of the Constitution of the Republic of South Africa, 1996. Rather than pricing services per square metre, a senior GDE official arbitrarily set flat-rate fees:

  • Primary schools: R250,000 to R270,000
  • Secondary schools: R250,000 to R290,000
  • District offices: R250,000 to R300,000

The SIU confirmed that these fees were disproportionate to the actual work performed and the cost of materials used. In terms of Act 74 of 1996, the SIU is referring all evidence of criminal conduct uncovered during the probe to the National Prosecuting Authority (NPA) for prosecution.

What this means for you, your business, or your clients

  • For yourself: No direct individual compliance obligations; professional advisors must note the strict judicial enforcement of public procurement regulations and the personal liability risks for officials facilitating informal procurement.
  • For your business: Entities bidding for state contracts must ensure strict adherence to formal Supply Chain Management (SCM) processes, as informal appointments (e.g., via WhatsApp or informal referrals) are constitutionally invalid and subject to asset forfeiture and clawbacks under Act 74 of 1996.
  • For your clients: Clients operating as government contractors must verify that all state tenders are priced transparently and in accordance with cost-effective, market-related metrics (such as square-meter rates) to avoid future contract invalidation, asset preservation orders, and referral to the National Prosecuting Authority.

Originally published at https://www.sanews.gov.za/south-africa/gauteng-education-covid-19-contractors-ordered-pay-back-money

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