Embattled facilities management group Bosasa is getting the cold shoulder from financial institutions and has lost a second major project this month.
Embattled facilities management group Bosasa is getting the cold shoulder from financial institutions and has lost a second major project this month because of a lack of financing.
The Eastern Cape transport department announced this week that it had cancelled its multibillion-rand contract with Phakisa Fleet Solutions Eastern Cape, a company in the Bosasa group that was awarded the tender to manage the province’s government vehicles.
At a price tag of R3,2-billion, the tender would have been one of the most expensive contracts ever awarded by a provincial government.
Three weeks ago Bosasa announced the closure of its SeaArk prawn farm in the Coega industrial development zone because of a lack of investment and the higher price of electricity.
After announcing the award of the fleet management tender in October this year, provincial transport minister Ghishma Barry was lambasted by Cosatu and opposition parties, which called for her sacking.
This came after reports that Phakisa’s shareholding included ‘unqualified” empowerment partners such as praise singer Zolani Mkiva
and the Eastern Cape House of
Shortly thereafter, Barry was dragged to court by unsuccessful bidder Makhubu Logistics, which levelled more allegations of irregularity in court papers filed with the Eastern Cape High Court in Bisho a month ago.
In his affidavits Makhubu chairperson Tshidi Seane claimed that:
- Makhubu, trading as Freight Dynamics, submitted a tender more than R1-billion lower than Phakisa, but was disqualified after a
- Phakisa should have been disqualified because it could not submit a bid bond of R600 000 that was valid for 180 days; and
- ‘Arbitrary and irrational” scoring saw Makhubu lose a potential 57 points that would have prevented its disqualification from the tendering process.
In some instances Phakisa scored more than 100% for certain categories. Certain adjudicators failed to score Makhubu at all.
After initially opposing the court action, Barry announced on Monday that she had reached a settlement with Makhubu. The settlement is based on Barry’s confirmation that no legally binding contract existed between her department and Phakisa.
‘The [department] has been advised that as a consequence of the non-fulfilment of a condition precedent in the agreement with Phakisa, there is no binding agreement between the department and Phakisa. The condition precedent related to the obtaining of finances by Phakisa from a financial institution, which has not occurred.”
As a consequence, Makhubu agreed to withdraw its review application.
According to Barry’s spokesperson, Ncedo Kumbaca, negotiations were under way with Fleet Africa, the former service provider whose contract expired earlier this year, to continue providing vehicles to the provincial government until a new tender was issued. This includes ambulances, rescue vehicles and disaster trucks.
Bosasa spokesperson Papa Leshabane’s only response was that Phakisa is a private company ‘and conducts its business as such”.
Bosasa was recently fingered by Special Investigating Unit (SIU) head Willie Hofmeyr in Parliament for allegedly bribing top prison officials to win contracts worth R1,7-billion.
The National Prosecuting Authority confirmed that it had received a report from the SIU and sent it to the police for further investigation.