Sanral Roy canceled R17.47 billion in the tender

South Africa’s National Roads Agency (Sunral) last week canceled a judicial tender worth R17.473 billion, casting doubt on the sustainability and viability of South Africa’s civil engineering industry.

The tender for the R3.428 billion Mtentu River Bridge, one of the country’s priority projects aimed at stimulating the economy after the Kovid-19 epidemic, is one of the canceled tenders.

Sunral’s spokesperson Bhusi Mona confirmed on Tuesday that the other canceled tenders were:

  • EB Cloete Interchange Improvement Tender worth R4.302 billion;

  • N3 Ashburton Interchange tender worth R1.814 billion; And

  • The tender price for the R56 Matatiele rehabilitation is R1.057 billion.

Mona added that the open road tolling tender (TCH operator) worth R6.872 billion has come to an end.

“The tenders were canceled due to a material irregularity in the tender process where a resolution passed by the board in January 2020 did not implement the evaluation of the said tenders,” he said.

‘Crisis’ for construction and economy

Webster Mfabe, CEO of the SA Forum of Civil Engineering Contractors (Safcec), said on Tuesday that the cancellation of the tender was a crisis for the construction industry and the recovery of the South African economy.

Mfebe says these tenders are conducive to the survival of the construction industry and have become a costly opportunity.

“The ripple effect is far-reaching and adverse for all parties affected by the cancellation of the project as a whole.

“This is a perennial problem facing South African infrastructure across the board, which is why this economy is still within the sub-investment grade criteria set by the rating agency,” he said.

In the context of the Mtentu River Bridge project, Mfebe said that the cancellation of tenders by international partners “twice slapped in the face” sent a “very bad signal that South Africa as a country is not bankable”.

President Cyril Ramaphosa said last September during a supervised visit to Sanral’s N2 Wild Coast project, which includes the construction of the Moskiba and Amtantu bridges, which would create about 8,000 direct full-time jobs and 21,000 to 28,000 indirect jobs. .

Ramaphosa said it would translate into a wage bill of about R750 million, and a further R4 billion would be spent on targeted enterprise development during project construction.

Concours, in partnership with China Communications Construction Company, a global construction engineering company, was the sole bidder for the Emtenatu River Bridge tender that met Sanral’s technical standards and whose bid was subsequently judged by Sunral.

‘Totally heartbreaking’

Concours CEO Lucas Teckie said on Tuesday: “We were heartbroken when we received this letter of cancellation after so much investment in submitting bids.

“The president has told the nation that these are priority projects that will be used as a mechanism to stimulate our economy. It’s the opposite of what happened. ”

Tekki added that the cancellation makes the management decisions by the construction company management extremely ineffective.

He said Concours missed certain opportunities because it knew these resources would be placed in the Mtentu River Bridge project.

“Now we have lost those opportunities because we did not respond to them because we think our capabilities will be taken but now it has not happened,” he said.


He also mentioned the holding cost for the tech workers and the capital equipment and its obligations to the lenders as the contractors have to be on site within 20 to 25 days after the submission of general tender and their performance bonds and guarantees have to be made within 14 days.

Avoiding chaos, Sanral says

Mona said it is common knowledge that for a proper governance environment to exist, board decisions must be implemented by management “if not, of course, the argument is about the legitimacy of the board’s decision in question”.

Any alternative to this would lead to a breakdown of the regime and indeed chaos, which Sanral has so far avoided, he said.

Mona said the board’s decision was informed by the conclusion of an active audit conducted by internal audit and legal, both reinforced by an external legal opinion.

“No prudent board has allowed such awards to proceed in the face of legal opinions and internal audit decisions.

“It is unfortunate that the cancellations will now delay the implementation of critical infrastructure projects.

“However, it cannot be said that the system of governance must be thrown out of the window because we are all in a hurry to implement it now,” he said.

Irregular Sanral’s sole, the contractor said

Another contractor, who did not want to be named, insisted that the only irregularity was internal sanural irregularities.

So Sanral should have had a commercial and legal treatment, probably with the help of the Auditor-General and the national treasury, so it “didn’t throw the baby out with the bath water”.

Questions were also raised about how some of the tenders submitted to Sanral’s board for approval complied with the board’s resolution and others did not.

“What is happening is almost a deliberate concerted effort to destroy and kill the remnants of the sector,” he said.

Questioning the ‘real reason’ for cancellation

WBHO Group CEO Wolfgang Nef said it had tendered for the EB Clotte Interchange Improvements and the N3 Ashburton Interchange tender.

“We are disappointed that they have been canceled and have not been able to establish the real reason for the cancellation,” he said.

Nef says that if Sanral had done all this work, it would probably have resulted in a construction boom.

Rudolf Forry, CEO of Roubex, said it was affected by the cancellation of the EB Clot Interchange Improvement tender and was surprised by other cancellations.

David Fraser, executive chairman of Peregrine Capital, said the cancellation was “incredibly disappointing.”

“A few years ago Sunral had an efficient and reliable delivery system for large projects in this country but unfortunately, for whatever reason, that capacity seems to have been lost in the last few years, which is actually quite worrying,” he said. .

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