Durban Metro pays R600 million more for fuel tender

ETHEKWINI Municipality has pumped R600 million more into a R1.7 billion eight-year fuel tender, which was recently cancelled and awarded to another company. The additional amount was approved in May, but opposition councillors say they do not recall the item being tabled at Exco or full council for approval.

The contract was awarded in 2016 to Q Tique 27 to provide home-bowser and on-road petrol and diesel to 6600 city vehicles for R1.7 billion over 96 months. The company would secure facilities to store fuel underground at municipal sites; facilitate the refuelling of vehicles at BP forecourts and provide the city with an automated fuelling solution controlling the dispensation of fuel and recording related information without manual intervention.

However, in April this year the city replaced Q Tique with BP Masana, which had been supplying the fuel to Q Tique. Q Tique director Abel Modise told the Daily News last week that the cancellation was being handled by his lawyers. He had said he was suing eThekwini for more than R20 million after the city “frustrated” his efforts to make payment for services rendered before the abrupt cancellation of his contract.

“The city says we are in breach of our contractual obligations, yet our problems started when we realised that there were issues in the tender document that put the company in a compromising position,” he said. This related to the omission of payment of dealer surcharge fees, which Modise said were included in all previous tenders issued, and agreements entered into by the city relating to fuel supply.

A municipal source said the city ought to explain the process followed in changing companies. The source said the extension of tender funds usually follows a process involving a request for additional funding being tabled at Exco and full council for approval. “They (the city) cancelled the contract and the next day we were told that the tender was given to a new company. The termination or cancellation of the contract is questionable.

A R1.7bn tender is awarded to a black-owned company, and just over three years later the contract is cancelled and given to another company a day later. “Which tender processes were followed? This new political administration owes the taxpayer an explanation on how a decision was reached to cancel, award the tender to another company and approve an additional R600m.”

The city said it had complied with all its contractual obligations and all due processes were followed when BP Manasa was appointed. “This contract has now been terminated as the supplier was in breach of contract and by their own admission advised that could not remedy the situation and prevent the stoppage of the fuel supply to the municipality.