Rössing Uranium stands accused of letting senior employees off the hook easily even after an internal probe had found that they had flouted the company’s procurement policy.
Superintendent for Projects, Hennie Lacock and Project Engineer Edward Robberts have been fingered in a plot that saw Rössing paying for goods at inflated prices even before they were delivered.
Insiders at the mining multinational have lifted the lid on alleged dodgy dealings by the duo, who by manoeuvres described as underhand ensured that a firm providing fire safety equipment was paid even before it delivered the goods.
The private firm, Fast Fire Services CC, is said to have been paid in advance, on top of having charged over N$100 000 on top of the original bid price.
They allegedly bypassed company procurement processes. An internal investigation was conducted last year following allegations of an unprocedural payment for Solvent Tank Fire suppression system material, acquired from Fast Fire Services.
The probe was initiated to determine why the required due diligence and application of the prescribed RUL policies and procedures were not adhered to during the acquisition of the Solvent Tank Fire suppression system equipment.
Rössing Uranium Limited’s Managing Director Werner Duvenhage did not respond to questions related to the matter saying “this is an internal matter”. Duvenhage however stated that all allegations were probed to ascertain their veracity and adequate steps were subsequently taken.
Documents seen by The Patriot indicate that in 2015, Rössing’s investment committee approved a request from the mine’s superintendent for protection services, Silvanus Johannes, to replace outdated fire panels and to install fire suppression systems at the SX plant and Solvent Tanks. The tender was subsequently awarded to Fast Fire after the bidding process.
A senior Rössing source has confirmed the documents in The Patriot’s possession.
Despite concerns raised over the non-delivery of the purchased solvent tank fire suppression system equipment, the mine’s Project Engineer Edward Robberts initiated a goods receipt to activate the payment of the undelivered fire equipment which was approved and authorised by the Superintendent for Projects, Hennie Lacock.
The two, according to information at hand agreed to ensure that the solvent tank equipment would be delivered by 31 October 2017.
However, by 13 November 2017 only 12 line items out of the proposed list of 49, representing a value of N$196 224.28 against the payment balance of N$840 049.48 were delivered. This is despite the fact that Lacock and Robberts reported full delivery of all material to the site.
Another inspection was carried out on 23 November 2017. It found that all purchased material, except the high value ‘Misting Equipment’, were delivered.
According to the report: “Mr. Lacock advised the item as a long lead time stock component which required a down payment upon placing the order. Mr. Lacock and Mr. Robberts further elaborated on why they actioned the pre-delivery overall payment in an attempt to avoid future price escalations.”
The probe found that Rössing ended up paying more than N$100 000 on top of the original tender bid pricing. The mine in the end paid N$840 049.48 instead of the original bid price of N$745 196.41.
At least four of the five items were inflated.
The probe also discovered that there was no signed variation agreement on price escalations. It also found that RUL procedures and conditions with regards to the application and processing of pre-payments were not followed.
Documents in the possession of The Patriot also indicate that despite the standing RUL practice dictating that contractual pre-payments should only be processed once cleared with procurement and the finance department, this was not adhered to.
By the time the report was concluded, the Misting Equipment that cost Rössing N$457 079 was not delivered at the time the probe was concluded.
Lacock and Robberts now stand accused of not following RUL procedures with regards to payments of undelivered items.
And while Lacock was found to have proposed a rationale for the un-procedural invoice payment as a measure to avoid future escalations while being cognisant of the fact that four out of five of the paid Solvent tank line items were inflated, Robberts stands accused of collaborating with Fast Fire to make unapproved increases to the tendered bill of quantities.
Robberts also stands accused of extending the end date of the contract from 28 February 2017 to February 2018. “There is no supporting variation agreement to authenticate the integrity of this decision,” noted the damning report.
Although the duo were initially suspended, Rössing sources say they are back at work.
Van Schalkwyk described the findings as “shocking and disappointing.
The big take away I take from this, is how badly we are currently managing contracts and that our procurement activities with regards to the project space is certainly not working,” Rössing’s CFO Shaan van Schalkwyk said in an email dated 15 December 2017. In one of the documents, Van Schalkwyk recommended that Robberts and Lacock’s suspensions should be lifted.
Van Schalkwyk also recommended that “Fast Fire Services should be considered for the next wave of Track Implementation”.
Critics said such a move is a direct threat towards fair competition rules towards other potential bidders when the expression of interest is put out.
He also indicated that extensions made to the contract were not formally documented through the company’s procurement system.
“An extension was done through a variation agreement, signed by the Supply Chain Manager, Edmund Roberts. This is already a problem as well, as he did not sign the original contract.
The extension was only signed on 21 December 2016, almost six months after the expiry date, and extended to 28 February 2017,” he revealed.
Robberts “further extended the agreement to 28 February 2018, he is not even in procurement, never mind appropriate Levels of Authority,” noted our source.
According to Van Schalkwyk, the contract between Rossing and Fast Fire contains penalty clauses for late delivery, however, by extending the project through variation agreements, the clauses were never triggered.