SANRAL investigates contractors over alleged tender irregularities

The South African National Roads Agency (SANRAL) is investigating Base Major Construction Company and the China State Engineering Corporation South Africa (CSC) for alleged irregularities discovered during the bid adjudication process for the R1.57 billion Masekwaspoort tender.

This was revealed by Transport Minister Barbara Creecy during a question-and-answer session in Parliament last month.

Base Major Construction entered into a joint venture with China State Engineering Corporation South Africa (CSC) for the Masekwaspoort tender.

Creecy was responding to a question posed by ActionSA Member of Parliament Malebo Kobe on whether she had been informed about uMngeni-uThukela Water’s intention to blacklist China State Engineering Corporation (South Africa) (Pty) Ltd and Base Major Construction (Pty) Ltd.

Umgeni-Uthukela Water (UUW) issued a notice of intention in November last year to restrict China State Engineering Corporation (SA) (Pty) Ltd from conducting business with the state.

The state owned entity (UUW) cited allegations of "fraudulent misrepresentations" associated with the company's Lower Umkhomazi Bulk Water Works Project tender submission as the basis for their actions.

The UUW's allegations relate to concerns over procurement integrity and transparency regarding CSC's corresponding tender submission.

The tender process was initiated in August 2023 for the construction of phase 2 of the Lower Umkhomazi Bulk Water Works Project.

Creecy indicated that she was informed of the intention by UUW to blacklist China State Engineering Corporation (SA) (Pty) Ltd and Base Major Construction (Pty) Ltd, and that this matter was being investigated for SANRAL to determine its current and future relationships with the bidders.

“In doing so, the advice of the National Treasury will be sourced," said Creecy.

In responding to whether she was informed of the suspension of the Sanral executive with relation to the China state Engineering Company tender, Creecy said she was aware, including the  suspension of the executive in question.

The said executive was placed on precautionary leave due to their alleged interference in tender awarded to CSC.

"I can now confirm that SANRAL has been directed to approach the High Court to have the relevant tender set aside in due course.

"It is important to note that whenever bidders are preferred in an upcoming award, the allegations and impending blacklisting will be communicated to the bidder to provide a response, in anticipation of the award.

"This is in tandem with the audi alterum partum doctrine for the right to a reply and/or making representations prior to a decision.”

Creecy further stated that SANRAL will review the responses against the documentary evidence at its disposal, to ascertain whether there was prima facie evidence of a case against the bidder.

She mentioned that should the response from the bidder not be satisfactory, SANRAL has the right to disqualify the bidder.

ActionSA expressed concern that there appeared to be a disregard for public procurement integrity and the protection of public funds.

“Compromised entities cannot be allowed continued access to multi-million rand tenders while serious allegations remain unresolved.

ActionSA will pursue this matter until the Minister accounts and proper oversight is restored,” the party said in a statement.

Transport spokesperson Collen Msibi referred the publication to SANRAL, which did not respond to questions sent to them in December.

SANRAL had previously admitted to uncovering significant irregularities in the award of the improvement of the National Route 1 Section 28 from Masekwaspoort (26.50 KM to 70.00 KM) to the joint venture led by China State Engineering Corporation (South Africa) (Pty) Ltd and subsequently set aside the contract.

In response to the Daily News' questions, CSC provided a reply on behalf of both companies.

They stated that there were no adverse findings made against the companies in any legal forum to date, and they had a strong track record of delivering value in public infrastructure projects in South Africa.

“As such, CSC is entitled to due process before any purported blacklisting can take place.

"The allegations raised in the letter from the CEO of Umgeni-Uthukela Water (UUW) were never the reasons given for disqualifying CSC during the award process.

"These are new claims that seek to retroactively justify CSC’s disqualification after CSC took the awarding of the contract on judicial review. CSC's bid was R1.8 billion lower than the bid selected by the CEO, who overruled UUW's own bid appeal committee, after it found in favour of CSC.

"Since CSC was not awarded the contract, there is no question of it benefiting improperly, which is a basic requirement for the Treasury to blacklist a company. Nonetheless, CSC will defend these claims if required,” the CSC responded in a statement.

DAILY NEWS