NZINGA QUNTA: Sunral [South African National Roads Agency] canceled tenders worth more than 17 billion rubles, saying there were significant violations.
Read: Sanral cancels 17.47 billion rupees in tenders that have been recognized
Sanral spokeswoman Wuxi Mona joins me on the line. Very good evening and thank you very much for your time. Nice to talk to you tonight. Just explain to us which tenders have been canceled and why?
VUSI MONA: Good evening. In total, these are five tenders.
One is a monumental bridge [Mtentu River Bridge] that we are building in the Eastern Cape, there is a denouement of EB Cloete [improvements project] in Durban, R56 Matatiele [rehabilitation project in the Eastern Cape]you have here in Gauteng there is a tender to pay for the open road, the fifth there from me will pop up [N3 Ashburton Interchange in Pietermaritzburg] – but there are only five tenders.
The reason they were canceled – on January 28, 2020, the Sanral Board decided that our design consultants involved in the design and development of specifications should not be involved in the evaluation of participants ’materials.
So far, this decision has not been implemented by management in evaluating the five affected tenders. How did the board find out about this? This was established through active assurance, which is usually conducted by the internal audit and legal department for tenders above a certain price. Tenders over Rs 750 crore are being actively reassured so that the board can make sure the management has done the right thing.
Thus, it was found that we did not comply with this decision of the Board.
This was supported by an external legal opinion. So the board didn’t just look at Sanral’s internal and legal audit conclusion. He subjected the results of this exercise to reassurance to an external legal opinion.
An important conclusion followed from this exercise, which mainly stated that the participation of design consultants in the technical assessment did not comply with the board’s resolution and therefore constituted a material breach.
NZINGA QUNTA: Good. Was the period of time covered by the canceled tenders, and was the resolution you just described to me regarding the people involved in the project, the only reason or decision that was violated by these tenders?
VUSI MONA: Well, in terms of council resolution, specific council resolution, yes. But there were other flaws in the tender process that led to violations.
For example, there was an application that had to be conceived as irresponsible and therefore disqualified because it was not filed in the prescribed and required format as indicated in the specifications.
But this application was submitted to the council for approval when it was to be disqualified.
There is another one of the five I mentioned where the amount of work has been increased by additional roads to meet the 30% subcontracting requirement in Sanral.
To explain this, we put this project up for tender; the contender says, look, I can’t meet on this 30% project, but if you give me extra roads, I’ll go for it. Now it increases the amount of work.
And, still with the 30% requirement, there is one case where without board approval, the 30% requirement has been reduced to 15% – things that require board approval.
And then the board said to management: sorry, we can’t get out of this. You will need to go back to the drawing board. And the board is alive in that it will be a blow to the construction industry.
So they told management that you are doing it as soon as possible. For four months you had to overestimate our debt, because we are alive before the impact on the construction industry, but we need to critically put the infrastructure to stimulate the economy, create jobs.
So this is an instruction from the board.
NZINGA QUNTA: Good. Mr. Mona, very briefly – but I have many points that I would like to highlight – just a little more clarity. So I read what you say in response to what you got, that the alternative to not following management procedures is chaos.
The answer to CEOs like Lucas Ceki of Concor is that what you did as Sanral is chaos, and the economy you just talked about and recovery is holding back people and doing [what is] contrary to stimulating the economy. So I just wanted to know your answer to that.
And, two, [what are] the good relationship you had with these affected service providers, if any?
VUSI MONA: Well, we hear what the industry is saying – that it’s chaos. But I think respectfully, it would be more chaotic if the council’s decisions were ignored. I’m sure the captain of the industry you’re quoting – of course, in this company they don’t do business in a way where the board of that company makes decisions and the management just slips to ignore those decisions. That would be chaotic.
So, from where we sit, the Sanral board actually avoids situations where there is a breakdown of control caused by …
NZINGA QUNTA: Very briefly – sorry for the interview, we have another interview, so sorry for getting up. I just want clarity in what you mentioned earlier.
These tenders have been canceled. Do people need to re-evaluate and put things in order, or do they need to start purchasing from scratch and tenders for these tenders from scratch?
VUSI MONA: Definitely because the process has stopped.
NZINGA QUNTA: Good. Thank you so much for your time on updating SAfm Moneyweb Market tonight. Wuxi Mona, Sanral’s spokesman, told us there about the cancellation of tenders worth Rs 17 billion and more.