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Huge irregular expenditure – GNT on verge of collapse

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State-owned companies under Limpopo Economic Development Agency (Leda) continue to incur huge amounts in irregular expenditure.
This was learnt when the entity recently appeared before the Standing Committee on Public Accounts (Scopa) at Parliamentary Village. According to information made available to Polokwane Observer, Leda board chairperson Mpho Makwana and his entourage laboured extensively on the entity’s deteriorating state of affairs.
It was learnt that the entity incurred cumulative irregular expenditure to the tune of R122,660 million in the previous two financial years under review. The breakdown of irregular expenditure as presented by the entity shows R45,590 million for Leda, R30,284 million for Great North Transport (GNT) and R46,784 million for Corridor Mining Resources (CMR).
It was further reported that Scopa members put strong emphasis on the widening amount of fruitless and wasteful expenditure between the two financial years under review. The amount rose from R1,231 million in 2017/18 to R1,964 million in the next financial year.
The committee then recommended that the accounting authority must create an environment of zero tolerance to non-compliance with supply chain management regulations. It was further recommended that the entity should implement the Auditor-General’s action plan in order to achieve a clean audit opinion.
GNT, a Leda subsidiary which is on the verge of collapse due to its bad financial state as declared by the Auditor-General, has reportedly been receiving grant after grant from the shareholder without any remarkable improvement.
According to the entity’s acting Chief Financial Officer, Ishmael Hlongwani the current recapitalisation process which entails a purchase of a new fleet shall turn the corner on the sustainability of the entity’s transport subsidiary.
However, the committee intercepted Hlongwani’s further attempt to unpack a three year R380 million injection to GNT and requested a comprehensive report on the general state of affairs at GNT as well as the entity’s outsourcing plans and privatisation policy, if any.

Story: ENDY SENYATSI
>>endy@observer.co.za