Zuko Komisa
- The Western Cape High Court has declared the National Student Financial Aid Scheme’s (NSFAS) direct payment tender processes unlawful and invalid.
- The court found the contracts unconstitutional due to severe irregularities, including improper tender cancellations and inadequate internal controls.
- Although the contracts were voided, the court found no wrongdoing by the service providers and awarded them verified compensation for expenses incurred.
The National Student Financial Aid Scheme (NSFAS) and the Special Investigating Unit (SIU) have welcomed a Western Cape High Court judgment declaring the procurement processes and service agreements for the student funding payment system unlawful and invalid.
The ruling, delivered in the case of eZaga Holdings (Pty) Ltd v NSFAS and Others, struck down service level agreements concluded with eZaga Holdings, Coinvest Africa, Noracco Corporation, and Tenet Technology.
The court found the procurement process unconstitutional and marred by irregularities, including improper tender cancellations, non-compliance with mandatory requirements, and weak internal controls.
In a joint statement, NSFAS and the SIU stated that the ruling vindicates their ongoing efforts to correct significant governance failures within the funding body:
“The judgment not only vindicates our efforts in identifying and addressing significant governance failures but also reinforces our resolve to root out maladministration and safeguard the integrity of public procurement processes, ensuring that resources entrusted to NSFAS are used in the best interests of South Africa’s students.”
The court found no evidence that the appointed service providers were involved in corruption or maladministration.
Consequently, the judge awarded just and equitable compensation, allowing the affected companies to claim reasonable expenses and profits incurred under the invalidated agreements.
NSFAS confirmed it will engage constructively with the providers to process these claims, which will be subject to strict independent verification.
Both organisations reaffirmed their commitment to restoring public confidence in the administration of student financial aid, adding:
“We wish to reassure all stakeholders, including students, parents, and the public, that NSFAS remain steadfast in their dedication to upholding integrity and restoring confidence in the administration of student financial aid.”
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