Bosasa’s end means riots loom at SA’s most hardcore prisons
Correctional services department launches war room and activates emergency plans as fears of prison riots mount
The liquidation of Bosasa – which feeds 29% of the country’s prison population and runs SA’s largest repatriation centre – has thrown the correctional services and home affairs departments into turmoil.
Announcing on Monday that it was closing its doors, Bosasa – now known as African Global Operations – said it had been forced to do so because FNB and Absa had dropped it as a client because of reputational risk. It said its 4,500 workers would now be without jobs.
For weeks Bosasa has been under fire for how it allegedly bought government ministers and senior public servants, including correctional services commissioner Linda Mti, to secure nearly R10bn worth of tenders.
Until Monday, Bosasa provided food to 46,434 inmates. It also runs the Lindela Repatriation Centre in Krugersdorp, which houses up to 4,000 foreigners.
Its liquidation means that all its contracts must cease immediately, which includes servicing and operating prison security systems, providing food to prisoners and staffing the repatriation centre and feeding deportees.
On Monday, Lindela staff downed tools with immediate effect, while correctional services launched a war room, activated emergency plans to deal with potential prison riots, and prepared to meet the national treasury to secure urgent funding for interim plans to feed prisoners.
Prisoners from Johannesburg and Pretoria told Times Select they had given prison officials 24 hours to ensure there were no meal interruptions.
“If there are,” said a Johannesburg prisoner, “there is going to be hell.”
An awaiting-trial prisoner at Pretoria’s Kgosi Mampuru II prison said they would riot if their food was stopped or interrupted.
“There were problems last week. No one told us what was happening. They were late with meals. Now we know why. If they are late again or the food is stopped it will be chaos here.”
Reacting to Bosasa’s announcement, correctional services spokesperson Singabakho Nxumalo, who confirmed an emergency meeting was to be held with treasury officials, said the department had taken steps to “ensure uninterrupted provision of nutrition at correctional centres”.
“The department has set up a war room and is working on an operational plan.
“The war room has activated the emergency response plan, which will mitigate identified risks and those that may accidentally emerge. A security plan has also been activated which will ensure that safety and security is maintained.
“Bosasa provided catering services to Pollsmoor [Cape Town], Johannesburg, Kgosi Mampuru [Pretoria], St Albans [Port Elizabeth], Modderbee [Benoni], Krugersdorp and Westville [Durban] prisons.”
He said they were in talks with Bosasa over its liquidation.
On recouping money from Bosasa for contracts the department had already been paid for, Nxumalo said there were consequences when services were interrupted.
“The department will follow normal processes as contained in the service agreement with African Global Operations.”
Home affairs spokesperson Siya Qoza said the contract with Bosasa covered security, accommodation, catering, health services, sport and library services to the deportees.
“There are currently about 700 people at Lindela. “The department is seeking an urgent meeting with Bosasa, and will take legal advice.”
Police and Prisons Civil Rights Union spokesperson Richard Mamabolo said the liquidation meant unused funds had to be urgently retrieved from Bosasa, with tenders the company ran having to be properly allocated to new service providers.
“There is a lot riding on this, including safety and security. It’s not just feeding systems which are being interrupted. Bosasa also had security tenders with the department, which included fencing and CCTV, which will now not be maintained, repaired or operated.
“This has put lives in danger and needs to be addressed urgently before security threats develop.”
Nainesh Desai, FNB Risk spokesperson, declined to comment “due to client confidentiality”, while Absa failed to respond to questions.
Bosasa’s board chairperson, Johannes Gumede, said on Monday that because of the banks’ decisions, and the refusal by other national and international financial institutions to assist, they would not be able to operate from March 1.
“The extensive reputational damage in the past few months has resulted in financial institutions determining that [African Global Operations] poses a reputation risk for them as clients.
“The decisions are not based on the group’s liquidity status, financial stability, operational performance or growth forecasts. The group is commercially solvent. Tragically the group will be unable to trade without a bank account.”
Lamenting job losses, Gumede said the overall result was that 25,000 people would be affected by the liquidation, with 32 crèches in Orange Farm outside Johannesburg, which it supported, also affected.
“We have contributed to the improvement of service delivery … serving our clients with the best standards … no one has reported that we have failed to deliver quality services to our clients.”
Gordons Institute of Business Science economics lecturer Dr Roelof Botha said an important message from the announcement was that the current judicial inquiries were being taken seriously.
“Now more than ever the powers of the auditor-general’s office need to be strengthened so that when prima facie evidence of corruption is found, judicial processes can be launched against individuals and businesses.”