The SA National Roads Agency (Sanral) board is not sure if there was any corruption in the tender process – which totaled R17.473 billion – which was canceled last week.
On Monday, Sanral Board chairperson Themba Mambio could not unequivocally say that further tenders would not be canceled.
Mahambi said the reason for the cancellation of the tender judged by the board in January 2020 was that the Sanrale contractor bid evaluation process was “a major, potentially corrupt, error”. He said the process allows the same service provider to design for an infrastructure project, develop technical features for the tender for that project and determine the technical bid recommended by the bid evaluation committee for the award if it meets other criteria.
Mhambi said that on January 28, 2020, Sanral’s board passed a resolution that consultants who are involved in the design and development of technical features should not be involved in the evaluation of technical deposits by bidders.
“The rationale for the resolution was to ensure that there was separation of duties and segregation, which is a well-known principle of governance.
“We’re here today in part because, for reasons that are still purposefully determined, the board has discovered for more than a year that the separation did not work, thus violating an internal regulation, and therefore effectively asking the board for the rewards.” For note by MBAC (Management Bid Adjudication Committee), ”he said.
Mhambi said in light of a significant internal control and breach of its fiduciary responsibilities, the Sanral Board had no choice but to refuse to approve the planned award.
He said that in three of the five canceled tenders, there were other compelling reasons for the board’s refusal to approve the award recommendation.
The canceled tenders are:
- The tender for the Mtentu River Bridge is worth R3.428 billion, one of the priority projects of the President of the country.
- EB Cloete Interchange Improvement Tender worth R4.302 billion.
- The N3 Ashburton Interchange tender is valued at R1.814 billion.
- The tender price for the R56 Matatiele rehabilitation is R1.057 billion.
The R6.872 billion Gauteng Freeway Improvement Project (GFIP) open road tolling tender (TCH operator) has also been completed.
Mhambi said Sanral’s board did not know if corruption was involved in the canceled tender, but did know that an internal regulation that was intended to ensure that no signs of corruption had occurred was not respected.
“Therefore, we cannot guarantee that … in the same way that there was no corruption, we cannot conclusively say that there was corruption,” he said.
More cancellations are possible
Commenting on the possibility of further tender cancellations, Mhambi said tenders below R750 million had never been seen in “deep detail” by Sanral’s board.
It also told Acting Sunral CEO Lungail Madalala that it would also need to know about tenders below R750 million which did not comply with the board’s resolution.
Mhambi hopes that there will be more tenders which did not comply with the board resolution.
“Of course about those [still] Come to the board … and where these resolutions have not been implemented, we are publicly rejecting them here and now because continuity is part of the need to be a board and so our decision on these will apply to any other case if we do not comply with our resolution. ” Said.
Mambi denies canceling the tender, citing a breach of trust between Sunral’s board and its management, insisting that only a few Sunral employees deal with the tender proceedings.
To hold the board of Embalula Sanral accountable
Transport Minister Fikile Mbalula said the strategic nature of the projects in question required a Department of Transportation so that the principles of good governance were not compromised and the judicial process could withstand scrutiny.
“We must do everything in our power to ensure that the integrity of the award process is not questioned.
“Failure to adhere to supply chain management policies will result in rewards being challenged in court, implementation of projects will be stalled.
“Our PRASA (South African Passenger Rail Agency) has the first experience of a case that has the potential to hold projects for years.
“Those who are upset by the board’s decision on the matter have resorted to the law and can go to court to try the matter,” he said.
Embalula added that his intention was to hold Sanral’s board accountable for its decisions and to ensure that it works in the best interests of the company and the country.
“So I will not hesitate to act against the board if evidence is found that the board was negligent in discharging its fiduciary duties.
“It is similarly my expectation that the board will not hesitate to implement consequential management against those responsible for the errors that resulted from its decision not to award these tenders,” he said.
Mahambi said Sanral’s board was as concerned as anyone in the industry that the cancellation of the tender would delay the implementation of important infrastructure projects and possibly affect the construction industry.
He said that in order to reduce the lost time and opportunity, the board of Sanral has directed the management to legally re-advertise the tenders and create necessary conditions for allocation within the next four months.
Mhambi said Sanral’s board has decided to secure the assistance of an independent public body with expertise in procuring infrastructure to assist in the process of advertising, evaluating and judging five tenders for recommendations to the board.