The postponement of the appointment of the National Lottery Licence operator has ignited a firestorm of discontent among Parliamentarians, who on Wednesday questioned the motives behind the Department of Trade, Industry and Competition's (the ditc) handling of the tender process.
The decision to extend the timeline by a year has raised suspicions, particularly regarding the direct engagement of the dtic minister Parks Tau with various bidders, including the current operator, Ithuba Holdings.
The Portfolio Committee on Trade demanded that Tau, who along with department officials was conspicuously absent at the presentation of the National Lotteries Commission (NLC) financial results for 2023/2024, appear before it to account for the postponement.
Economic Freedom Fighters (EFF) MP Sinawo Thambo questioned the NLC board if it did not consider it illegal for the minister to be involved with the operational affairs of the NLC by communicating directly with the bidders of the R180 billion tender.
Tambo said the continuous extensions despite the numerous evaluations made were hard to understand as the minister had the NLC to offer advice.
Democractic Alliance MP Toby Chance said it was incredulous that the NLC had announced that the adjudication process had been completed and that had been suddenly turned into a one year extension.
"I have been informed that an Request for Proposal has been issued for a temporary licence to cover the period between May. Realistically, any possible winner of that tender could be Ithuba because we know that there is a six months period between operators," Chance said.
"For all practical purposes, it is impossible for a new operator to get its systems in place before 1st June 2025. The only outcome of the RFP could be a further extension of Ituba’s licence, or the non-awarding of a temporary licence and the cessation of Lotto ticket sales. Neither of these scenarios is acceptable and goes to show that the awarding of the new licence has been bungled from start to finish."
He questiond the discrepancies between the NLC's approved and revised budgets, which he said indicated significant discrepancies, including increases for board members emoluments as they increased from R8 million to R15m, with consultancy fees going up 108 % from R28m to R58m, legal fees increased from R31m to R78m, investigation costs from R5m to R39m, while travel and accommodation went up from R19m to R26m.
NLC chief risk officer, Adam Mufulari, said according to impact assessment studies done on the impact in the event an operator was not appointed in the next financial year, the NLC had capacity to fund the R1.4bn grant recipients, pay salaries for the 354 employees and generally continue operations for two years.
Furthermore, the NLC reported a strong third-quarter performance, with total ticket sales exceeding R5.8bn, yielding an NLC share of R1.4bn.
The Commission achieved cash disbursements totalling R847 million while significantly improving turnaround times—a critical metric for grant recipients.
The average turnaround time dropped from over 100 days in the first half of the year to 70 days, with a target to maintain below the statutory average of 60 days.
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