Sanral under pressure to award R17.4bn in cancelled tenders by end-September

The re-advertisement by the South African National Roads Agency (Sanral) of the five cancelled tenders for strategic projects worth R17.4 billion has raised fresh doubts about its ability to meet its anticipated target of evaluating, adjudicating and awarding these tenders by the end of September 2022.

This stems from the fact that the closing date for the submission of three of these tenders – the Mtentu River Bridge (originally valued at R3.428 billion), the EB Cloete Interchange Improvements project (R4.302 billion) and the N3 Ashburton Interchange project (R1.814 billion) – is 21 September, seven working days before the end-September anticipated target date.

The closing date for the Open Road Tolling (ORT) e-toll system on the Gauteng Freeway Improvement Project (GFIP), originally valued at R6.872 billion, and the R56 Matatiele rehabilitation tender, valued at R1.057 billion, is 7 September.

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The five tenders were cancelled in May.

Sanral said 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 these tenders.

This resulted in Sanral in June this year appointing the Development Bank of Southern Africa (DBSA) to act as its infrastructure procurement and delivery management support on these five strategic projects.

Sanral acting CEO Lehlohonolo Memeza said in June it’s anticipated that the tender awards for the five cancelled projects will be made by September.

Timelines

Sanral GM for marketing and communications Vusi Mona said in response to a Moneyweb query: “No one can predict how the tender processes for all these tenders will unfold after the closing dates. Sanral remains committed to meeting set deadlines. The intention is to deploy multiple teams to speed up the process of handling the evaluation and adjudication.”

Former Sanral CEO Nazir Alli last week reiterated his view that it is unlikely Sanral will be able to meet its end-September deadline.

“We will wait and see. One can notch anything and in trying to beat the deadline not necessarily do a thorough job. It’s up to them to decide how they are going to do that.”

Alli added that it could take two to three months for a very experienced team to evaluate, adjudicate and award a complex project, such as the Mtentu Bridge project.

“That’s my view but some people may think they are ‘Superman’ or ‘Superwoman’ and they can do it in a couple of weeks or a couple of days,” he said.

Strange move

Consulting Engineers South Africa (Cesa) CEO Chris Campbell questioned the reason for re-advertising the Mtentu Bridge tender, which is a massive and complicated contract, when only one bidder passed the technical evaluation and qualified as a bidder.

Campbell also questioned how the DBSA will manage the administrative process around the tender evaluation, stressing that this process alone will require more than a month if the DBSA does not use the original design engineer but puts “new fresh eyes” on it.

He believes it will be impossible for contractors to do justice to submitting reliable bids within a month to a new competitive process and it is unlikely bids will be received from contractors who did not submit bids previously.

Campbell also believes four months to process the tenders “is overly optimistic for large and complex tenders”, particularly if the scope of the projects is being changed, as suggested by the Black Business Council In The Built Environment (BBCBE).

Prioritising transformation 

BBCBE CEO Gregory Mofokeng said the council had meetings with the Sanral board and the DBSA infrastructure delivery team during which the DBSA committed to ensuring that transformation will be prioritised on these projects.

“The BBCBE petitioned DBSA to unbundle these projects to broaden participation of targeted groupings and to realise economic inclusivity,” he said.

Sanral board chair Themba Mhambi confirmed to Moneyweb previously that the scope of the projects will not change because the scope is based on the technical design.

Several previous bidders for these cancelled tenders confirmed to Moneyweb last week that the technical aspects of the projects have not changed in the re-advertised tenders, but that there is an increased focus on the 30% subcontracting requirement and local community participation goals.

No room for further delays

Master Builders South Africa executive director Roy Mnisi said it is important there are no further delays to these strategic projects because Sanral has made a commitment to the industry and the people of South Africa and must stick to the timeframes announced.

Mnisi said Sanral deals with the same kind of contracts over and over again and, given that this is Sanral’s core business, it should be able to anticipate how long a tender process will take.

To this end Mona added that it is common cause that Sanral made some pronouncements about the re-advertisement of tenders and also gave some “tentative timeframes” for the conclusion of the tender process, which naturally culminates in the award of the contracts.

He said the Sanral board and Minister of Transport Fikile Mbalula also gave effect and content to those pronouncements by signalling government’s intent to advertise and award these tenders within the shortest time possible.

Hence the board and the minister engaged with the key stakeholders – the construction industry and the media – to emphasise the seriousness and urgency with which the government wanted to deal with this matter, he added.

“The impact of the cancellation of the tenders on the economy of the country is of grave concern to government,” he said.

“Decisions were then taken within this context – the needs of the country and the interests of the service providers [both contractors and consulting firms].”