Sanral board dismisses construction industry concerns after cancelling R17.5bn in tenders

Roads agency labelled some of the comments made by leaders in the industry as ‘sensational’.
Themba Mhambi, chairperson of Sanral's board. Image: Sanral website

The board of the South African National Roads Agency (Sanral), chaired by Themba Mhambi, has dismissed concerns raised by the construction and civil engineering industry this week regarding its move to cancel major road construction tenders to the tune of almost R17.5 billion.

In a strongly worded statement issued on Thursday, Sanral labelled some of the comments made by leaders in the industry as “unfactual” and  “sensational”, noting that it would hold a media briefing on Monday (May 23) to “set the record straight”.

Read: Sanral cancels R17.47bn in adjudicated tenders

Sanral’s latest statement follows Moneyweb on Wednesday breaking the news of the cancelation of the tenders, which cover some of the country’s most significant road infrastructure developments, such as the R3.4 billion Mtentu River Bridge project (Eastern Cape) and the R4.3 billion tender for the overhaul of Durban’s EB Cloete Interchange.

In its initial response to Moneyweb, the agency said that the tenders were cancelled “due to a material irregularity in the tender process where a resolution made by the board in January 2020 was not implemented in the evaluation of the said tenders”.

The CEOs of several construction groups including Concor, WBHO and Raubex, as well as CEO of  the SA Forum of Civil Engineering Contractors, were amongst those to raise concerns about the impact of the cancellations on the industry.

Ignorance on Sanral decision making

“Over the past two days several reports have appeared in the media concerning the cancellation of Sanral tenders amounting to R17.473 billion. It should immediately be obvious to any right thinking individual that this decision would not have been taken for flimsy reasons,” Sanral said in its statement on Thursday.

“Contained in these media reports were a number of comments, some of which demonstrated ignorance about how decisions on procurement at Sanral are made.”

“Some of these comments suggest there are bidders who want to intimidate Sanral to award them tenders even where that should not be the case,” the agency added.

Commenting further on the issue, Mhambi said: “Some of these comments came from captains of industry in the construction sector who, it would seem, expect the Sanral board to disregard the violation of board resolutions and the flouting of procurement policies and procedures.”

Listen to Sanral spokesman Vusi Mona explain why the tenders were cancelled (or read the transcript): 

The Sanral board media briefing on Monday will also be addressed by Transport Minister Fikile Mbalula.

“It is important that we take the country and our stakeholders into confidence about these matters and how our actions are in the best interest of Sanral and the public,” said Mhambi.

Sanral said the media briefing will focus on:

  • Non-compliance with and violation of its resolution which led to a material irregularity in the tendering process.
  • The involvement of external design consultants in the evaluation of tenders and therefore arrogating Sanral’s power to determine qualifying bidders to external private individuals, which constituted a material conflict of interest.
  • Reduction and cancellation of sub-contracting requirements without board approval, resulting in the exclusion of black economic empowerment companies at sub-contracting level and losing these companies more than R2 billion.
  • Patterns in the allocation of contracts in the past three years to show Sanral’s support for the industry, but also illustrating monopolies which are “at the heart of the misinformation about the cancellation of these tenders”.
  • Recommendation of entities that should have been disqualified.
  • Other lapses in the tendering processes.

Nondumiso Lehutso is a Moneyweb intern.

COMMENTS   4

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Socialist rule of defense no 1 = Deny !!!!!

“Reduction and cancellation of sub-contracting requirements without board approval, resulting in the exclusion of black economic empowerment companies at sub-contracting level and losing these companies more than R2 billion.”

I am guessing that this may have been due to the ConCourt ruling that the exclusionary (excluding whites) “BEE” clause in many government tenders was unconstitutional. The R2bn was probably a saving because the subcontractors generally cannot do the work at rates tendered by a massive, listed main contractor. But, also guessing, many of these “subcontractors” have strong ANC links so the cancellation took free taxpayer money out of the pockets of the ANC connected elites.

Demonstrating that ANC SA is a crooked black (as in painful actions laughed about as they are senseless) joke.

SANRAL appears to believe that their preferential procurement policy would survive a constitution test whereas Treasury’s policy did not…

This is a minefield. Most government entities use Treasury’s conditions / “guidelines”, dreamed up by Pravin Gordhan to enrich the ANC connected; mostly. These excluded white subcontractors, the conditions were challenged and overturned, now Treasury et al have gone into a sulk, reducing the number of tenders issued, awaiting “clarity” whatever that is.

But the decision was mostly taken that tenders that closed before the court ruling would continue with these essentially illegal conditions. Reality may be that there are not enough subcontractors, particularly competent ones and local communities get involved and stop the projects. All of this is linked to ward councillors and their pals, predominantly ANC aligned but in reality, out to enrich themselves or gain power.

None care about the projects themselves; like SANRAL who also don’t care.

End of comments.

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