Tourism Minister Patricia de Lille has found South African Tourism’s R1 billion (€51m) proposal to sponsor Tottenham Hotspur to be “unlawful and invalid”, and has strongly advised the marketing agency’s board to scrap the deal. 

Addressing the most hotly contested issue in her new portfolio, De Lille told media in Pretoria today (Friday, March 24) that her legal counsel had found the deal (if it was to go ahead) to be in contravention of the Public Finance Management Act (PFMA) and SA Tourism’s own supply chain management policy.

“It appears that the sponsorship is a service which was proposed to be acquired by procurement through ‘sole source’. Sole source procurement is, however, only allowed where there is no competition in the market and only one supplier is able to provide the goods or services, which does not appear to be the case here,” said De Lille.

She further stated that, because the sponsorship had not been budgeted for as required by the PFMA, the expenditure would be regarded as irregular or unauthorised.

“As a country, when we enter into such massive partnerships, it is vital that we are able to be fully accountable, that we are transparent and can answer South Africans clearly and honestly. My advice to the SA Tourism Board is that the proposal may as well be stopped completely,” De Lille said.

Answers demanded from SAT

De Lille wrote to SAT Board Chairperson Thozamile Botha on March 22 to address the legal issues and to delve further into the details of the deal. In her letter, she posed the following questions:

1. Has the Tottenham deal been formally cancelled? if so, provide written proof of same.

2. Does the Board regard the Tottenham deal to be a form of sole source procurement? If so, explain how the requirements for such a form of procurement (have) been met.

3. Does the Board regard the Tottenham deal to be a significant transaction that triggers the need for my prior approval? If so, will the Board request my approval and when?

4. Has the Tottenham deal been budgeted for in the 2022/23 budget? If not, why is expenditure on the deal not unauthorised or irregular within the meaning of those terms in the PFMA? 

In an interim response to De Lille’s queries, Botha stated that the deal had been conditionally approved by the SAT Board, but this had not given rise to a legally binding transaction.

“This is so because the Board was cognisant of the approvals that are required from both the Minister of Tourism and National Treasury prior to the transaction being consummated and becoming legally binding.” 

He further stated that the approval processes required under the PFMA were yet to commence.

“Therefore, we humbly submit that factually, there is currently no ‘unlawful and invalid’ transaction, as the transaction does not exist. Moreover, there is no Tottenham transaction to be cancelled as none has been concluded. What exists is an in-principle decision to commence the required processes towards conclusion of the transaction.”

Botha said that a detailed response would be submitted to the Minister by Wednesday, March 29.

Money must be carefully spent

De Lille said that the money earmarked for the Tottenham deal could be better spent on a range of other activities to market South Africa as a tourism destination.

“As the Minister and as the Department of Tourism, we are committed to growing tourism, getting into untapped markets and truly reaching our full potential. However, everything we do will be done in accordance with the law and due process. Now in this time of global economic crisis, we need innovation and we need to work together to grow our markets and create more jobs for our people in a cost-effective manner.”

Taking to the stage briefly, Acting SA Tourism CEO Themba Khumalo stressed that the agency would continue to strive to fulfil its mandate of marketing South Africa as a destination.

“We are mandated to market the country internationally and domestically. And in respect of the Tourism Sector Recovery Plan of 2021, part of that document is to recover tourism to pre-pandemic levels.”

Parliament’s Tourism Portfolio Committee, which has demanded an end to the deal, had previously asked for the funds to be diverted into rehabilitating dilapidated tourism infrastructure.

Board irregularities to be probed

De Lille said that alleged irregularities in board appointments at SA Tourism, raised by the Tourism Portfolio Committee, would also be probed.

“All the board matters are still under consideration and once I have considered the inputs from all parties, including getting the reasons for resignations of board members, then I will be able to give a more comprehensive answer.”