R263m Pikitup tender scandal

Pikitup boss Amanda Nair controversially awarded a multimillion-rand tender to a firm implicated in alleged fraud in a forensic investigation. This is according to sources close to the matter, who said this was despite the bid adjudication committee (BAC) questioning the decision to award it to Aqua Transport Plant Hire, which was implicated in alleged wrong-doing in a forensic investigation by Ernst & Young. Pikitup forked out close to R6 million for Ernst & Young to conduct an investigation into several companies providing services to it. The investigation recommended that Aqua should be charged criminally for fraud because of alleged irregular activities, including suspected tender collusion. Ernst & Young said the company should also be made to pay back money it had overcharged Pikitup.

The report reads in part: “Pikitup should consider recovering amounts totalling R428 041.90 that were overcharged in respect of goods and services supplied. “Consideration should be given to laying a criminal charge of fraud with SAPS in respect of an invoice for R97 920 submitted to Pikitup by Aqua for plant and equipment hire at various sites in April and May 2011 in circumstances where Pikitup employees acknowledged receipt of services, but plant was not actually delivered.” Despite the damning report seen by The Star, a three-year Yellow Plant tender worth R263m was awarded to Aqua in March this year. Aqua provides compactor machines that are used in Pikitup landfill sites to suppress rubbish and make it smaller.

The bid committee refused to make a recommendation and suggested instead that Nair should issue a letter stating that she was comfortable with the awarding of the tender to Aqua. The minutes of a committee meeting dated January 17 this year read: “The BAC mentioned that there are more reasons to decline the tender award than recommend, based on the discoveries of the dispute with the preferred bidder (Aqua) and the possibility of a collusive tendering.” The committee suggested that Nair conduct a further investigation into the dispute between the recommended bidder Aqua Transport and Pikitup. In another bid committee meeting that took place on February 18 this year, the issue of double-invoicing by Aqua Transport was discussed as well as the “possibility of tender collusion”.

The committee noted the forensic findings that “some signs of tender collusion were observed and the possibility of tender collusion cannot be ruled out”. In addition, a legal adviser said there seemed “to be more reasons not to award the tender than award”. Suren Maharaj, the chief financial officer and interim chief technology officer, said in an e-mail addressed to several adjudication committee members: “In the interest of expediting decisions for tomorrow morning’s meeting, I inform you that the MD (Nair) has refused to issue the assurance letter regarding The Yellow Plant tender.”

Pikitup’s Lester Peter wrote to the bid committee, saying Nair was under no obligation to provide the “assurance letter”. “The request or instruction or demand to provide the said letter is improper if not unlawful,” he said. An insider said the tender was approved after the committee chairperson was replaced. The committee has since been disbanded and replaced by a new one. Pikitup spokeswoman Desiree Ntshingila declined to comment on the tender award. She confirmed that Nair had met Aqua on issues relating to “a forensic investigation” and their contract for the provision of plant equipment to Pikitup for garden refuse sites. Ntshingila said there was no conflict of interest in Nair meeting the bidder as Aqua had not been criminally charged. Aqua Transport had not responded to enquiries by the time of publication.