Avatar photo

By Roy Cokayne

Moneyweb: Freelance journalist


Legal challenge arises over Prasa’s tender award for Boksburg explosion bridge

This tender was advertised on or about 15 May 2023; it closed at noon on 14 June 2023


There has been a high court challenge to the award by the Passenger Rail Agency of South Africa (Prasa) of a tender to a contractor for the demolition, design and construction of a new railroad bridge in Boksburg to replace the bridge destroyed by a gas explosion on Christmas Eve in 2022.

More than 40 people reportedly died in the explosion when a tanker transporting liquefied petroleum gas exploded after it became wedged beneath a bridge about 100 metres from the Tambo Memorial Hospital.

ALSO READ: Boksburg explosion: A year later, unanswered questions linger

The legal challenge follows Prasa awarding the tender to Re A Letamisa Trading & Projects CC, whose tender price was R30 million higher than Raubex Construction (Pty) Ltd, part of the JSE-listed construction group Raubex.

This tender was advertised on or about 15 May 2023; it closed at noon on 14 June 2023, and a letter dated 30 August 2023 was sent to Re A Letamisa Trading & Projects advising it of the tender award to the firm.

Raubex claimed it submitted a compliant and responsive tender when submitting a bid of R49 725 018.35, while Re A Letamisa Trading & Projects’ bid was R79 764 000.00.

Raubex said the difference between the tenders is a staggering R30 038 981.65 for the 10-month project.

Over this 10-month period, the difference in tender prices equates to R3 million per month more than taxpayers must pay for this tender, it said.

ALSO READ: Memorial held for healthcare workers killed in gas explosion

Raubex said its tender was less than R50 million and, therefore, should have been evaluated during the Stage 3 evaluation on the 80/20 basis, which, if it was the lowest tenderer, means it must have got a maximum of 80 points for the price and 20 points for its broad-based black economic empowerment (B-BBEE) status.

It added that it is a B-BBEE Level 1, which entitles it to obtain the maximum 20 points.

It is further alleged that Re A Letamisa Trading & Projects did not comply with the mandatory and technical requirements of the tender.

Non-compliant with requirements

Prasa allegedly also failed to comply with its tender requirements, including failing to notify the unsuccessful bidder of the outcome of the tender and, contrary to normal practice, failing to read out the tender results after the closing date.

These alleged irregularities resulted in Raubex Construction applying to review and set aside the tender award.

ALSO READ: Atteridgeville school gas explosion: Families await closure

The application was heard in the High Court in Johannesburg at the end of November 2023, with judgment reserved.

There are unconfirmed claims that Re A Letamisa Trading & Projects did not have a black economic empowerment (BEE) certificate, was not registered with the Construction Industry Development Board (CIDB) and did not have a track record.

CIDB corporate communications director Kotli Molise confirmed to Moneyweb that all contractors doing business with the government must be registered with the board, and their registration is publicly displayed on the CIDB’s website.

Molise further confirmed she conducted a search but could not find Re A Letamisa Trading & Projects’s registration on the CIDB’s website.

Attempts to obtain comment from Re A Letamisa Trading & Projects were unsuccessful.

‘Prasa opposing application’

Prasa spokesperson Andiswa Makanda confirmed that an urgent application to interdict the project, pending the review of the tender, has been brought to the court.

But Makanda declined a Moneyweb request for access to the public court documents related to the application to review and set aside the award of the contract to Re A Letamisa Trading & Projects.

“Prasa is opposing the application. Pending the finalisation of the court process, there will be no communication around this matter,” she said.

Attempts to obtain access to the public court documents from Raubex were also unsuccessful.

ALSO READ: ‘Good news’ regarding Boksburg tanker explosion damage to OR Tambo Memorial hospital

Prior to launching the application to review and set aside the tender award, Raubex launched a high court application to order Prasa to provide it with a number of documents related to the award of the tender to Re A Letamisa Trading & Projects.

These documents included the full and written reasons for Prasa’s decision to award the tender to Re A Letamisa Trading & Projects and not to Raubex Construction and the minutes of meetings of the bid evaluation and adjudication committees.

Prasa is believed to have provided the requested documents to Raubex prior to the matter being heard.

‘Only two bids submitted’

Raubex said it was only aware of two bids that had been submitted for this tender.

It attributed this to the tender results not being read out after the closing date and Prasa failing to respond to its request for a full list of the tenderers.

Raubex claimed that the fact the tender results were not read out and never published by Prasa, and Prasa’s refusal and/or failure to provide it with the tender results after being requested to do so, confirms that this tender process was not transparent, fair, equitable and competitive as required by Section 217 of the Constitution Act 108 of 1996.

It further alleged that Prasa did not comply with its own tender regulations and failed to provide Raubex with a letter of regret, which resulted in the company not having any knowledge that the tender had been awarded until 5 October 2023, which made it necessary for it to act with undue haste and request the reasons and documents on an expedited basis.

This article was republished from Moneyweb. Read the original here