The board of directors of the South African National Roads Agency Limited (Sanral) has asked Sanral management to, within the next four months, re-announce and allocate the R17.47 billion in tenders that the board canceled earlier this month, citing “material irregularities”.
Speaking at a press conference at Centurion on Monday, Sanral’s board chairman Themba Mhambi added that the council would recruit an independent public institution with infrastructure expertise to assist in the process of advertising and awarding tenders, and to make a recommendation to the council on successful bidders.
This body has been identified, he noted, but not yet employed.
“This process has been smeared and its integrity has been compromised internally within Sanral,” Mhambi said. “We are clear as the board that there is prima facie evidence of people speaking to the same bidders from inside Sanral, based on the press reports we see.”
The bids Sanral’s board has not approved are the Mtentu Bridge Wild Coast project on the N2, valued at R3.4 billion; the rehabilitation of the R56 Matatiele, in the Eastern Cape, at 1 billion rand; the N3 Ashburton interchange in KwaZulu-Natal at R1.8 billion; and improvements to the EB Cloete interchange (N2 and N3 connection point in KwaZulu-Natal), at R4.3 billion.
The Open Road Tolling tender in Gauteng, valued at R6.88 billion, has expired and has not been renewed.
Sanral noted in an earlier statement that the tenders were canceled due to “a material irregularity in the tendering process” where a resolution passed by its board of directors in January 2020 did not not been implemented in the evaluation of the offers concerned.
Minister of Transport Fikile Mbalula said on Monday that he was awaiting a report from the board of directors on this matter. He stressed the importance of not repeating mistakes made during the state capture era or allowing malfeasance in the name of expediency.
Mbalula advised “those aggrieved” by the cancellation to challenge the decision in court.
2020 Board Resolution
Mhambi explained that the five canceled tenders had one thing in common: the failure to implement a Sanral board resolution regarding segregation of duties.
He said the board discovered in January 2020 that the process for evaluating bids from construction contractors within Sanral had a “major and potentially corrupt flaw”.
He said the process allows the same service provider who developed the design drawings and technical specifications for the projects (which are then announced), to also be the party responsible for determining, on a technical level, what offer would be recommended for award for bid evaluation. Committee.
“Now if it’s not a conflict of interest; if it doesn’t have the potential to promote corruption, someone has to tell me we are crazy as a board,” Mhambi said.
“In 2020, we said that consultants involved in the development of specifications should not be involved in the evaluation of technical submissions by bidders. Let another independent engineering consultant review the offers and make a recommendation.
“Then we discovered that our recommendation had not been affected, and we sanctioned the awarding of those tenders. . . as violating an internal control.
“Contrary to the instructions of the jury in all the tenders in question, the design of the project and the development of the technical specifications were the same person or entity which decided on the technical offers to be considered for the award.
“A person doing all of these things is extremely dangerous, because it effectively makes a service provider almost the sole determinant of who gets contracts from Sanral. It goes against a fair, equitable procurement process. , cost-effective and transparent,” Mhambi said.
“Nobody could guarantee that no collusion had taken place.”
While the five contracts were deemed insufficient with respect to the 2020 resolution, other deficiencies were also discovered in the Mtentu, Ashburton and Open Road Tolling projects.
With the construction process of the Mtentu Bridge, a bid which should have been disqualified for not having been submitted in the prescribed format in terms of specifications, was accepted.
It shouldn’t have been, Mhambi said.
The specifications also allowed for an imperfect increase in the scope of work to meet the 30% subcontract request requirement, which effectively drew a line through this requirement.
“This deviation was made without the required board approval and was therefore irregular,” Mhambi said.
Another flaw was that a specific bidder was allowed to provide guarantees – “and not even guarantees – instead of implementing the principle that Sanral retains the money owed as “insurance against faulty work. quality or unfinished work,” Mhambi said.
“All bidders should be treated equally.”
As part of Ashburton’s tender, it was discovered that a bidder who was not supposed to be disqualified was in fact disqualified.
Finally, as part of the Open Road Tolling project, the 30% subcontracting requirement has been reduced to 15%.
Within government, companies awarded large contracts must subcontract 30% of the contract value, with a focus on providing work to small businesses and/or communities.
Sanral’s Board of Directors is as concerned as anyone in the industry about the effects that the cancellation of tenders would have on the implementation of critical infrastructure projects in South Africa, as well as on the construction industry, Mhambi said.
“However, it cannot be said that governance and procurement processes must be compromised at all costs.
“The Public Entities (SOE) sector is still reeling from the consequences of the savings achieved. Short memories in this regard are unfortunate.
Mhambi added that the board was “committed” to getting to the bottom of misconduct and irregularities, and following up on the management of the relevant consequences.
He also noted that procurement processes within Sanral only allowed for board review of projects above R750 million, and that the agency would have to investigate any failures in procurement calls. offers below this threshold.
CESA challenges the decision of the board of directors of Sanral
Consulting Engineers South Africa (Cesa) released a statement on Monday saying it disagreed with the Sanral board’s decision to cancel ‘critical infrastructure tenders’ based on the involvement of design engineers.
“There is a clear lack of understanding of the role of an independently appointed design engineer in the tender award process,” said Cesa’s CEO. Chris Campbell.
“A consulting engineer may be involved first in the design of an infrastructure project, followed by contract analysis and possibly site supervision services – all acting as a trusted advisor to the client organization, particularly where a public sector client has limited, specifically experienced resources.
“Failure to address these capacity challenges within the public sector in this way will have significant consequences for our ability to leverage infrastructure development as a catalyst for our economic recovery,” Campbell said.
“The role of a design engineer is to provide independent advice to the client organization acting as the owner’s engineer,” he added.
“The design or consulting engineer is distinctly distinct from the contractor and is bound by a code of ethics and exposes himself to enormous risks in the exercise of this function.
“In fact, an engineer in this position found guilty of acting unethically could put his company at risk of being expelled from Cesa and the individual responsible could be disqualified from providing such professional services by the Engineering Council of South Africa.”
The appointment of the consulting engineer, as a trusted advisor to the client, is separate from that of the contractor, so there is no conflict of interest as alleged by the current board of Sanral , Campbell said.
“In many cases, Sanral is not unique, many other public entities and state-owned enterprises have taken a similar approach and continue to do so, all with the same governance and accountability considerations, none of which have was deemed insufficient in this regard by the Office of the Auditor General.
“The question therefore arises whether Sanral’s board resolution was sufficiently informed by local and global best practices.”