Sanral board orders the cancellation and re-tendering of construction projects worth R17 billion

The South African National Roads Agency (Sanral) said yesterday that bids for the R17 billion worth of construction tenders cancelled by its board had to be re-advertised and adjudicated anew within the next four months.

Confirmation of the decision to cancel the awarded tenders came as some losing bidders have been criticising the Sanral board for “killing the industry”. For its decision to cancel the tenders, Sanral explained that a key principle, ensuring that design consultants were not involved in the evaluation of bid submissions, had not been upheld.

The bidding process for at least three projects that include the N2 Wild Coast Mtentu Bridge, R56 Matatiele rehabilitation and Ashburton Interchange had violated public finance management policies, hence the termination of the contracts, Sanral said yesterday. It highlighted that the cancellation of the award of the R17 billion worth of construction tenders was “aimed at ensuring that taxpayers’ money is protected” in line with the laws of the country.

Themba Mhambi, the chairperson of the Sanral board during a media briefing, said, “In light of that violation of a crucial internal control, and in line with its fiduciary responsibility, the board had no option but to refuse to sanction the planned awards.”

Awarding of the GFIP Open Road Tolling tender has also been cancelled, with Sanral charging that there had been “a reduction of the sub-contracting requirement from 30 percent to 15 percent without approval by the board” and “before permission was requested” from National Treasury.

The Consulting Engineers South Africa (Cesa) grouping of engineering firms is, however, challenging the decision by Sanral “to cancel critical infrastructure tenders on the basis that their adjudication process was flawed due to the involvement of design engineers in the tender adjudication” process.

Chris Campbell, the chief executive of Cesa, said, “There is a clear lack of understanding of the role of an independently appointed design engineer in the contractor tender adjudication process. Sanral often does not have sufficient internal technical knowledge and capacity to perform such in-depth analyses of construction bids on projects.”

However, Mhambi insisted though that the projects had to be re-tendered “to mitigate the lost time and opportunities” with the board of Sanral instructing management “to create the necessary conditions for the tenders to be readvertised legally” and allocated within the next four months.

“Pursuant to ensuring the independence and integrity of a process which has been obviously internally compromised, the board has also resolved to secure the assistance of an independent public institution with infrastructure procurement expertise to assist with the process of getting the five tenders advertised, evaluated and adjudicated for recommendation of award to the board,” added Mhambi.

Transport Minister, Fikile Mbalula, said although the projects affected by the Sanral board’s decision to cancel awarded tenders were of a strategic nature, good governance as a “key tenet of government’s service delivery mandate” had to be upheld. This was especially important in the wake of the state capture scandals under former president Jacob Zuma’s administration.

“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,” said the minister.