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‘Those aggrieved can go to court’ – Mbalula on cancelled R17bn Sanral tenders
Mbalula said Sanral had acted "in the best interests" of the company
Transport Minister Fikile Mbalula. Picture: Gallo Images/Lefty Shivambu
Transport Minister Fikile Mbalula has defended the South African National Road Agency Limited’s (Sanral’s) move to not approve the awarding of contracts valued at R17.47 billion.
Mbalula held a press conference on Monday to provide some clarity on the cancellation of the five adjudicated tenders.
Last week, Sanral announced its decision to cancel the contracts, saying there were “material irregularities” in the awarding of the tenders.
“The tenders were cancelled due to a material irregularity in the tender process where a resolution made by the board in January 2020 was not implemented in the evaluation of the said tenders,” Sanral spokesperson Vusi Mona said.
READ MORE: Sanral blames e-tolls impasse for R14.5 billion loss
The cancelled tenders include:
- The EB Cloete Interchange Improvements (Durban, KwaZulu-Natal) tender valued at R4.3 billion;
- Eastern Cape’s Mtentu River Bridge, valued at around R3.4 billion;
- The N3 Ashburton Interchange (Pietermaritzburg, KwaZulu-Natal) tender valued at R1.8 billion; and
- The R56 Matatiele (Eastern Cape) rehabilitation tender valued at just over R1 billion.
The last contract – Open Road Tolling tender (TCH Operator) valued at over R6.8 billion – had lapsed, according to Sanral.
‘Paying the price’
During Monday’s briefing, Mbalula said Sanral had acted “in the best interests” of the company as well as maintaining “good governance” in its decision to cancel the tenders.
“Good governance is a key tenet of our service delivery mandate and we will not compromise its underlying principles for expediency.
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“We have learnt invaluable lessons from the advent of state capture which brought to the fore lapses that paralysed strategic organs of state through rampant corruption that was left unchecked for too long,” he said.
Mbalula said the Passenger Rail Agency of South Africa (Prasa) was a good example of “how malfeasance and irregular contracts” can compromise service delivery.
“Today, we are still paying the price for those irregularities and corrupt practices,” he said.
“Furthermore, the strategic nature of the projects in question requires of us to ensure that governance principles are not undermined, and that the adjudication process can withstand scrutiny.
“We must do everything in our power to ensure that the integrity of the award process is not brought into question. Failure to uphold supply chain management principles will result in awards being challenged in courts, holding up the implementation of the projects.
“We have first-hand experience at Prasa on such litigation that has the potential to hold up projects for years,” Mbalula added.
‘Can approach the courts’
The minister invited those who were not satisfied by Sanral’s move can challenge the decision.
“Those aggrieved have recourse in law and can approach the courts to adjudicate the matter,” he said.
Mbalula also said he would hold the Sanral board accountable for any poor decisions.
“The strategic nature of the projects Sanral is responsible for require that the company be circumspect in handling procurement matters and ensure probity in the awarding of contracts.
READ MORE: Outa launches contempt of court application against Sanral and former CEO
“I will therefore not hesitate to act against the board if there is evidence that the board was derelict in the execution of its fiduciary duties.
“It is equally my expectation that the board will not hesitate to implement consequences management against those found culpable for the lapses that have resulted in the decision not to award these tenders,” the minister said.
‘Crisis’ for construction and the economy
The South African Forum of Civil Engineering Contractors (Safcec) told Moneyweb last week that the cancellations of the tender were a crisis for the construction industry and the recovery of the country’s economy.
Safcec’s CEO Webster Mfebe argued that the tenders were instrumental to the survival of the construction industry and become a lost opportunity cost.
Meanwhile, construction engineering company, Concor, said it was “heartbroken” over the cancelled tenders.
