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Sunday 21 April 2019
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Rössing quashes its own probe

RÖssing Uranium says an internal report that led to the suspension of two employees for alleged fraud-who have since been reinstated- was flawed and lacked context.
The report, which was compiled by RÖssing’s Specialist for Assets, Risk and Assurance Yvette Mtolo Phiri, detailed how RÖssing ended up paying almost N$100 000 on top of the original tender bid pricing for a Solvent Tank Fire suppression system supplied by Fast Fire Services CC.
Insiders at the mining multinational also lifted the lid on alleged dodgy dealings by senior managers, who by allegedly underhand manoeuvres, ensured that a firm providing fire safety equipment was paid even before it delivered the goods.
Superintendent for Projects Hennie Lacock and Project Engineer Edward Robberts were subsequently suspended following the internal probe. They have since been reinstated after being exonerated. 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’s managing director Werner Duvenhage this week explained the price escalation saying the amount paid was well within the confines of the contract.
“The amount referred to initially as an overpayment is far below the escalation which remained stagnant for the period. The services in respect of this contract included the supply of the fire suppression system with Fast Fire. It is typical for construction and service agreements that the client will be responsible for cost escalations not due to the contractor’s fault,” said Duvenhage. He said RÖssing overpaid because it caused the delay.
“The goods were to be procured from the UK and the delay was eventually approaching three years since issuing the tender. Messrs Lacock and Robberts therefore made a decision to make the prepayment in order to prevent any further price escalations, especially considering the slow progress on the overall project,” he said.
Duvenhage maintains that the duo made the correct decisions to effect a prepayment.
Regarding claims that the two took decisions that were not at their level, Duvenhage said: “The persons acted within their authority levels at the time. RÖssing’s annual cost of operation is in excess of N$3 billion. It is therefore important to have authority levels in place where leaders at different levels can make decisions to approve expenses and payments-this cannot be left to one or two individuals.”
Despite concerns raised over the non-delivery of the purchased solvent tank fire suppression system equipment, Robberts initiated a goods receipt to activate the payment of the undelivered fire equipment which was approved and authorised by 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.
The report, which Duvenhage has since quashed, 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 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. But while Duvenhage is opposed to the contents of the report, RÖssing’s chief financial officer Schaan Van Schalkwyk described the findings as “shocking and disappointing” when he first saw it. “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,” Van Schalkwyk said in an email dated 15 December 2017.
Asked whether the manner in which the procurement of the tanks was handled signals the existence of flaws in RÖssing’s procurement system, Duvenhage said: “This was not a procurement issue as the contract is in place and as explained above, all the controls in place at the time, were complied with. Despite this, we continuously improve and enhance our control systems further. One example of this improvement is the implementation of the contractor framework, which includes amongst other improvements, the implementation of the system called Track.”




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