Row over R80m tender secrets

South Africa’s three biggest shipbuilders, two of whom are based in Cape Town, are up in arms over the “lack of transparency” in an R80 million plough tug tender that has been delayed by Transnet for at least three years. Damen and Nautic Africa, based in Cape Town, and Southern African Shipyards (SAS), based in Durban, are concerned about the delay in awarding the contract, which has been repeatedly put out to tender and then retracted. Transnet has denied there is any lack of transparency, saying its tender process was fair and open. It comes as the government presses ahead with unlocking South Africa’s blue economy through Operation Phakisa, which according to President Jacob Zuma has the potential of contributing R177 billion to the country’s Gross Domestic Product by 2033. It also aims to create more than 1 million jobs.

According to tender documents, the plough tugs would form part of Transnet’s dredging fleet. The tugs are bed levellers which flatten out the peaks and troughs caused by dredgers on the sea floor. Transnet awarded the contract to an East London company last year. The decision was reversed after it was discovered that the company in question could not deliver on the terms of the tender agreement. Chief executive of Southern African Shipyards, Prasheen Maharaj said: “The issuing and cancellation of tenders is very disappointing for industry. “It takes a lot of time, effort and money to repeatedly tender and all of this is lost. It’s something we cannot afford in this harsh economic climate.” He said what they wanted was a fair and transparent tender process. He said this would help companies to make more informed decisions on whether or not to bid. Maharaj has previously said that the shipbuilding industry was ”haemorrhaging” jobs, and called on the government to streamline its procurement processes in an effort to create jobs.

Damen chairman Sam Montsi said transparency and professional adjudication would help Transnet to achieve the government’s Operation Phakisa objectives. “It is only when tenders are processed, adjudicated and awarded professionally, transparently and fairly, that the shipbuilding industry can help our government realise the objectives of Operation Phakisa. “This kind of experience with tenders is not only costly, but discouraging to the private sector,” he said. Chief executive of Nautic Africa James Fisher said he was disappointed with what was happening. Companies spend a great deal of money and resources when they prepared to bid, he said, and it was disappointing when their bids were disregarded. “While we want to support start-up companies, sophisticated jobs need to go to the more established companies, and in doing so, smaller companies can benefit from the supply chain,” Fisher said.

In a statement, Transnet’s chief financial officer Mohammed Abdool said the tender formed part of the organisation’s Dredging Services division’s fleet replacement programme, which was worth more than R2bn. Responding to the complaints of the shipbuilders, Abdool said: “TNPA acknowledges the competency of the country’s shipyards and promotes the usage of these through the localisation and supplier development requirements called for all in our tenders. “A local contractor, Tide Marine, was in fact awarded this tender and local companies have again been able to bid for the revised tender presently being adjudicated and it’s planned to be awarded by the end of July 2016.” Abdool also denied that the tender process lacked transparency. “All Transnet tenders and awards follow an open and public process in line with Transnet’s governance and procurement processes,” he said.