Four people have been arrested for allegedly colluding to defraud the department of public works and infrastructure of more than R2.8m.

Special Investigating Unit (SIU) spokesperson Kaizer Kganyago said the four suspects appeared in the Pretoria commercial crimes court on charges of fraud on Tuesday. They were released on bail of R2,000 each and the matter was postponed to June 17 for further investigation.

More arrests, including of the mastermind, are expected, he said.

Kganyago said a SIU and public works investigation uncovered that supply chain management officials allegedly colluded with businesses, friends and family members to defraud the department through cover quoting.

The issue was flagged by the department in 2015 after allegations were raised about procurement of goods and services at the Pretoria and Durban regional offices.

“The allegations focused on the day-to-day maintenance contracts which the department had awarded to service providers and possible cover quoting.”

The SIU’s investigation, Kganyago said, revealed a trend of certain contractors being awarded more contracts than others.

“This disparate award of contracts was underpinned by a practice that indicated that entities linked to certain individuals/entities appeared to quote in collusion with each other.

“The invitation of suppliers onto the database of suppliers appears to have created an environment where it is populated with entities all linked to a single individual who is the ultimate beneficiary of the contract award.”

The analysis of the data from the department revealed that 11 entities linked to one individual submitted quotations to the department, thus misrepresenting to the department that they were obtaining independent quotations.

“These actions led the department to believe the markets were dictating the prices being charged when in fact the prices were being determined by the alleged collusive actions of the 11 entities.”

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