Contract scandals continue to emerge

A Mail & Guardian investigation has identified three more dodgy national public works contracts worth R35,4-million, adding to a burgeoning list of problematic tender awards by the troubled department.

They include two high-profile Soccer World Cup projects to build new border posts that are now being investigated by the Special Investigating Unit (SIU). The other case involves raw sewage being pumped into the Vaal River from a dysfunctional waste water treatment plant.

The cases reveal how officials apparently manipulated tender procedures to award contracts to companies whose bids were substandard.

Common to two tender awards is businessman Sefako Molekwa.

In 2008 the department of public works touted its World Cup plans, including border post developments to help funnel tourists swiftly.

Among the posts were Skilpadshek on the Botswana border and Golela on the Swaziland border.

The project management contracts, worth nearly R5-million each, were awarded in about August 2008.

Sefako Consortium, the owners of which included Sefako Molekwa, won the contract for Golela, while Karabo Joint Venture, which the M&G has not traced, was awarded the Skilpadshek job.

According to the tender documents a different company, Virtual Buro (now Virtual Consulting), scored the most points and offered the lowest quotes.

Each of Karabo and Sefako, which applied for both Skilpadshek and Golela, was disqualified for one of the contracts for not providing proof that they had electrical engineering certificates, yet each was awarded the other contract.

This suggests a doctored process or gross oversight by the evaluation committee.

According to the committee, Virtual’s quote was too low and “unrealistic”. The national committee disagreed and wrote to then director general Manye Moroka requesting arbitration.

It told the director general that department operations chief Solly Malebye had inappropriately weighed in on procurement deliberations, saying “there was no need for the [evaluation committee] to reapply its mind or to rework the submission”.

But Moroka sided with Malebye, whose handwritten comment stated: “They [Virtual] have committed inadequate resources, hence their low price for now and no HDI [historically disadvantaged individuals].”

Malebye was later fired by former minister Geoff Doidge, apparently over the border post tenders.

After the contracts were awarded to Sefako and Karabo, Virtual complained to the treasury that the contracts violated procurement principles.

The Skilpadshek project has been plagued with problems and remains unfinished nine months after the World Cup.

SIU spokesperson Marika Muller confirmed this week that work managed by the department at several border posts “is included in the investigation”.

Public works department spokesperson Thamsanqa Mchunu said the SIU is investigating the awards, and the matter is sub judice. An official gave the M&G a phone number for someone who confirmed that he was Solly Malebye, former operations chief.

But after hearing the M&G‘s questions he said the documents were incorrect, that he was not Malebye and had never worked for the department: “Where did you get my number? This is not my number.”

Meanwhile, untreated raw sewage poured from Groenpunt Prison waste water treatment plant into the Vaal River near Vereeniging this week.

Sources said this had been happening for a month, since the arrival of a company called Neo Siyabonga Construction JV Mavio Trading Enterprise, a joint venture.

In February Neo Siyabonga was awarded a R26,7-million contract to run the treatment plants at Groenpunt and Losperfontein prisons.

But tender documents show that the company had no relevant experience and submitted blatantly misleading information in its bid.

It also appears to have had no intention of carrying out the contract and tried unsuccessfully to sell it to another firm for R1,2-million immediately after it was awarded.

Discrepancies in the Neo Siyabonga award prompted official project managers Virtual Consulting to complain to the treasury that “the question arises if ... public works is still evaluating tenders within the general procurement guidelines that set standards for behaviour, ethics and accountability, as required by the public service”.

According to its bid, the joint venture’s construction expertise lay with Sefako Molekwa’s Neo Siyabonga Construction and Plant Hire, which Molekwa runs with co-director Sankie Zungu.

The bid stated that Neo Siyabonga carried a Construction Industry Development Board rating of 6CE or 5CEPE, requiring it to employ a civil engineer.

Virtual Consulting’s letter said that Neo Siyabonga had indicated in its CIDB grading that Zeal Engineering was the engineer involved.

But Zeal’s Unathi Lukhele told the M&G that it had “no knowledge of this contract”.

“We don’t know Neo Siyabonga and we never went into a joint venture with them.”

CIDB spokesperson Hilda Ramokgadi confirmed that a forensic team was investigating.

In making such a bid, a company is expected to list the previous jobs it has completed, with contact numbers for verification.

Neo Siyabonga listed five completed projects but in four cases the contacts had never heard of the company or had nothing to do with the listed project.

Based on these and other concerns, the bid risk assessment concluded that there was “no evidence” that Neo Siyabonga had done relevant work previously.

The department’s bid committee motivated more than once for the second-placed bidder, Piet Bok Construction, to receive the contract because it had presented five well-supported previous contracts, specifically in waste water treatment and water purification.

But the adjudication committee overruled it for reasons that are unclear. Mchunu again declined to comment on this tender award.

Neo Siyabonga’s director, Sankie Zungu, did not reply to emailed questions, which she had requested.

The M&G Centre for Investigative Journalism, supported by M&G Media and the Open Society Foundation for South Africa, produced this story. All views are the centre’s. www.amabhungane.co.za.

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