Former Bosasa chief operations officer-turned-whistleblower Angelo Agrizzi on Wednesday confirmed that the department of correctional services gave Bosasa millions of rands worth of contracts in what is being termed "fiscal dumping".

Fiscal dumping by the department was first raised in a report by the Special Investigative Unit (SIU) which stated that this was the department's way of getting rid of money left at the end of the financial year by hurriedly spending funds before the end of a financial year even if it received no value for it in return.

Evidence leader Advocate Paul Pretorius read an excerpt from the SIU report in which the National Treasury raised complaints on fiscal dumping by correctional services and made recommendations for each of the four tenders the department had awarded to Bosasa and its front companies.

Agrizzi said in 2005 Bosasa co-founder Danny Mansell and chief executive Gavin Watson told him that the department had surplus funds in their budget that they needed to spend. He said Mansell and Watson instructed him to design a system where a television was placed in every cell and which was centrally distributed to prisons.  

On 3 March 2006, Sondolo IT -- a Bosasa front company -- was awarded a once-off service delivery agreement worth R224-million for the TV system even though the system became a flop.

"I consulted with various role players in the industry and designed such a system, which was submitted to Mansell and Gillingham. I was then instructed by Gavin Watson to have a specifications document drawn up. The specifications document was drafted by myself and Elandre Fourie from Pinnacle Micro (Pty) Ltd," Agrizzi said.

"When it came to to the department of correction services tenders, Bosasa had the entire access of the system. That was the whole plan to capture the state by capturing correctional services. It was to create a network. Sondolo IT received a tender even though it was only established a week before the tender submission date." 

The SIU report also found that the large amounts of money paid by correctional services to Bosasa's front company, Phezulu Fencing, very early on into the R486-million fencing project amounted to fiscal dumping.

Agrizzi told the Zondo Commission that the department of correctional services, at some point, also paid Bosasa an advance of R106-million for products that were supposedly needed to be imported. Agrizzi continues to testify.