Sanral faces scrutiny over tender award during contractor suspension
Two R1.5bn contracts awarded to same JV a day apart – both 'should be suspended' says Outa. Picture: Moneyweb
The South African National Roads Agency (Sanral) has allowed a Chinese joint venture (JV) to continue executing a R1.56 billion Eastern Cape road contract despite the registration of one of the JV partners to enable it to do public work being suspended at the time the tender award was made.
The Construction Industry Development Board (CIDB) registration of Base Major Construction (Pty) Ltd – part of the Base Major-China State Construction Engineering Corporation (CSCEC) JV – was suspended on 24 November 2024 and lifted on 9 January 2025.
ALSO READ: Sanral taking its time to investigate R1.57bn tender award
Two R1.57bn contracts, one legal challenge
A contract valued at R1.57 billion for the upgrade of the R61 from All Saints to Baziya was awarded to the JV on 28 November 2024, according to Sanral's website.
A day earlier – on 27 November 2024 – a contract worth R1.57 billion was awarded by Sanral to the same JV for the improvement of a section of the N1 from Masekwaspoort in Limpopo.
However, following a legal challenge to the Masekwaspoort award by Hillary Construction – the second lowest bidder – Sanral agreed to suspend this contract award pending the completion of an investigation by the roads agency.
This agreement was made an order of court on 14 February 2025, but Sanral has not yet completed the investigation.
Hillary Construction launched an urgent high court application to interdict Sanral from allowing the JV to implement and execute the Masekwaspoort contract pending the finalisation of Part B of its application to review and set aside the contract award to the JV.
It indicated it was seeking to set aside the award because Base Major's CIDB registration was suspended at the time the tender award was made.
ALSO READ: Sanral suspends R1.57bn contract award pending an investigation
Bidders can't become compliant 'later'
Organisation Undoing Tax Abuse (Outa) CEO Wayne Duvenage said on Tuesday that at the very least, both tender awards should have been subject to the same process.
If the law is that at the time of awarding the tenders, the successful bidder has to be compliant 'you can't say they became compliant later and it stands'.
'Both of the tender awards should be suspended and if Sanral wants to start again, they can, otherwise they have to go to the second best bidder.'
Sanral said on Friday it awarded the R61 tender to the Base Major Construction-CSCEC JV after undertaking its internal procurement processes.
It said there is no legal challenge to the awarding of the R61 tender and work is progressing as per norm.
However, in its response to Moneyweb's query, Sanral skirted around the issue of whether it is legal to award a tender to a contractor whose CIDB registration was not active at the time the award was made.
Sanral said bids for the tender were evaluated by the Bid Evaluation Committee (BEC) in February 2024.
'At this stage, the legal obligation to ascertain Base Major Construction's CIDB status arose. … [its] status with CIDB at that time was active and, after confirming this to be the case as part of the procurement process as legally required at evaluation stage, Sanral proceeded with the evaluation,' it said, adding that the responsive bids for the tender were adjudicated by the Bid Adjudication Committee (BAC) on 7 November 2024.
ALSO READ: Sanral: Concerns around multi-billion-rand contract awarded to highest bidder
'On this day, the BAC made a decision regarding the awarding of the tender to the JV.
'Base Major Construction's status with the CIDB was active at that time,' it said.
'In light of the relevant and applicable legal prescripts, such as the CIDB Act, Standards and Regulations relating to CIDB registration, the evaluation of the R61 tender to the JV was permissible, as was the award, and the procurement processes followed by Sanral were above board.
'Currently, Base Major Construction's status with the CIDB is active, and there is no impediment to the JV undertaking the construction work arising from the R61 tender.
'There is no reason for Sanral to suspend the R61 contract pending an investigation and, likewise, no need has arisen for Sanral to investigate the matter on account of an irregularity, of which there is none, and Sanral sees no reason to cancel, re-advertise and re-award the R61 tender,' it said.
Unik JV and WBHO were the other bidders for the R61 contract but neither challenged the award.
ALSO READ: Sanral faces scrutiny over board changes and possible tender award delays
Tenders 'not linked' – Sanral
Sanral stressed that the R61 and Maskwaspoort tenders are not linked.
It said the tenders were advertised separately, with different scopes of work, and were evaluated and adjudicated independently.
Sanral stated in its answering affidavit to Hillary Construction's urgent application regarding the Masekwaspoort tender that its board 'does not intend to take time to investigate the matter.'
The court disagreed, and it is now almost 21 weeks since the agreement between Sanral and Hillary Construction was made an order of court.
Sanral on Friday repeated what it had previously told Moneyweb about the time it was taking to complete the investigation.
'An investigation of this nature cannot, in the circumstances, be conducted overnight or rushed. This would not be in the interests of the litigating parties, being Sanral, the court and the public. There has been no delay in completing the investigation. All the relevant documents, as well as facts, are under consideration, and all relevant parties at Sanral are being consulted,' it said.
'The investigation will be completed timeously, after undergoing all the necessary processes, and Sanral will comply with the court order.'
ALSO READ: Sanral provided misleading information about its 'R53bn in tender awards'
Hidden agenda?
Outa's Duvenage said 'clearly there is an agenda when that [delays] happens'.
'They are really giving the public and journalists a runaround. They know what is wrong. They are not forging ahead with this investigation and speeding up the process.
'Everything is laborious because it just allows a continuation of this maladministration,' he said.
'Sanral is not working in the best interests of this country, which is an indictment on the board. The Sanral board should step down.'
This article was republished from Moneyweb. Read the original here.
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