The re-announcement by the South African State Roads Agency (Sanral) of five canceled tenders for strategic projects worth R17.4 billion has raised fresh doubts about its ability to meet its expected goal of evaluating, deciding and awarding these tenders to completion. September 2022
This follows from the fact that Art closing date for presentation three of these tenders – the Mtentu River Bridge (originally estimated at R3.428 billion), the EB Cloete Interchange Improvement Project (R4.302 billion) and the N3 Ashburton Interchange Project (R1.814 billion) – on 21 September, seven working days before the estimated target date of at the end of September.
The closing date for the Open Toll Collection (ORT) for the Gauteng Freeway Improvement Project (GFIP), initially valued at R6.872 billion, and the R56 Matatiele rehabilitation tender, valued at R1.057 billion, ends on 7 September. .
Five tenders were canceled in May.
Sanral said the tenders were canceled due to significant irregularities in the tender process where a resolution passed by the board in January 2020 was not followed in the evaluation of these tenders.
This led to Sanral in June this year appointing the Development Bank of South Africa (DBSA) to act as infrastructure procurement support and delivery management for these five strategic projects.
Sanral acting CEO Lehlahonala Memeza said in June that tenders for the five canceled projects were expected to be awarded by September.
Sanral’s general manager of marketing and communications Vusi Mona said in response to a Moneyweb query: “Nobody can predict how the tender processes will unfold for all these tenders once they close. Sanral remains committed to meeting the deadlines. The intention is to deploy multiple teams to expedite the assessment and decision-making process.”
Former Sanral CEO Nazir Ali last week reiterated his view that Sanral was unlikely to meet its end-of-September deadline.
“Let’s wait and see. You can do anything, and trying to meet a deadline doesn’t necessarily mean doing a thorough job. It is up to them to decide how they will do it.”
Ali added that a highly experienced team can take two to three months to assess, decide and award a complex project such as the Mtentu Bridge project.
“That’s my view, but some people can think they’re ‘Superman’ or ‘Superwoman’ and they can do it in a couple of weeks or a couple of days,” he said.
Consulting Engineers South Africa (Cesa) CEO Chris Campbell has questioned the reason for retendering the Mtentu Bridge, a massive and complex contract, when only one bidder passed the technical assessment and qualified as a bidder.
Campbell also questioned how the DBSA would manage the administrative process around the tender evaluation, stressing that the process alone would take more than a month if the DBSA did not use the original design engineer, but put a “fresh eye” on it.
He believes that contractors will not be able to properly submit credible bids within a month for the new competitive process, and it is unlikely that bids will be received from contractors who have not submitted bids before.
Campbell also believes that four months to process tenders is “overly optimistic for large and complex tenders”, particularly when the scope of projects varies, as suggested by the Black Business Council In The Built Environment (BBCBE).
Prioritization of transformation
BBCBE CEO Gregory Mafokeng said the board held meetings with the Sanral board and DBSA’s infrastructure development team, during which DBSA committed to ensuring that the transformation was prioritized for these projects.
“BBCBE has requested the DBSA to split these projects to widen the participation of target groups and realize economic inclusiveness,” he said.
Sanral chairman Thembo Mhambi previously confirmed to Moneyweb that the scope of the projects will not change because the scope is based on technical development.
Several previous bidders for these canceled tenders confirmed to Moneyweb last week that the technical aspects of the projects had not changed in the re-announced tenders, but there was an increased emphasis on subcontracting requirements of 30% and local community involvement targets.
There is no room for further delays
Master Builders South Africa chief executive Roy Mnisi said it was important that these strategic projects were not delayed because Sanral had made a commitment to the industry and the people of South Africa and had to stick to the announced timelines.
Mnisi said Sanral deals with the same contracts over and over again and given that this is Sanral’s core business, he should be able to predict how long the tender process will take.
To that end, Mona added that it is common cause that Sanral has made some announcements about the re-tendering and has also given some “indicative timelines” for the completion of the tendering process, which naturally culminates in the award of contracts.
He said the Sanral board and Transport Minister Fikile Mbalula have also given effect and substance to these statements, signaling the government’s intention to advertise and award these tenders as soon as possible.
As such, the council and the minister engaged with key stakeholders – the construction industry and the media – to emphasize the seriousness and urgency with which the government wanted to deal with the matter, he added.
“The impact of canceling tenders on the country’s economy is a matter of serious concern to the government,” he said.
“Decisions were made in this context – the needs of the country and the interests of service providers [both contractors and consulting firms].”