Wheels come off bus fuel tender

Out of gas: Metrobus was found by a private audit firm to have flouted procedure in awarding a lucrative tender for supplying it with diesel, but went ahead with the deal regardless. (Gallo Images)

Out of gas: Metrobus was found by a private audit firm to have flouted procedure in awarding a lucrative tender for supplying it with diesel, but went ahead with the deal regardless. (Gallo Images)

A report into procurement at the Johannesburg Metropolitan Bus Service (Metrobus) has revealed how the transport service ignored audit advice and proceeded with awarding a R200‑million fuel supply tender, despite concerns that multiple processes had been flouted.

Alleged irregularities in awarding the three-year contract are believed to be one of the main reasons behind deteriorating relations between the bus service’s suspended acting managing director, Sabata Makoele, and some members of the Metrobus board.

The Mail & Guardian has seen a 2016 report by audit company PwC, which found that multiple bidders seeking to supply diesel to Metrobus had been unfairly disqualified. And some of those that went through to the final stages of evaluation may not have qualified to make it that far.

“The principles of fairness, transparency, nonbias towards a predetermined outcome, competitiveness and cost-effectiveness have been compromised,” PwC said in its report.

“Since some of the findings may not be rectified, the impact on the tender process may deem the RFP [request for proposals] to be cancelled and reissued. However, the bid adjudicating committee may review the detailed findings and suggest the way forward,” the report read. 

Metrobus, however, said it was not aware of such advice and that all requirements were complied with in the awarding of the tender.

Of the four suppliers that went through to the final round of evaluation, one company, Tipublox Petroleum, was the recommended recipient of the tender, being the only bidder to meet the points threshold.

In addition to the unfair disqualifications of some suppliers, PwC auditors discovered that many tender documents had not even been opened and, “as a result, it may appear that the evaluation process may not be fairly evaluated”.

Added to this, despite suppliers being restricted to outsourcing no more than 25% of their services, Tipublox Petroleum planned to outsource 40% of its services, a factor that should have seen the company disqualified as a contender.

The M&G understands that Metrobus gave the remaining three bidders a stake in the tender, a move believed to be an attempt to conceal irregularities in the process.

But Metrobus spokesperson Nkosinathi Nkabinde said there was nothing untoward about the decision, which he said was made to minimise risk.

“The accounting officer [managing director, who at the time was Mavela Dlamini] took into account various factors — among others, the business risks of reliance on only one diesel supplier, the ability to ensure that there is continuity of the business and the support of up-and-coming businesses,” Nkabinde said.

“The decision was arrived at following proper consultation and advice.”

But a source at Metrobus disputed this claim, saying the decision to include the other three suppliers was suspicious.

“If anybody [of the remaining three companies] had made the threshold, you could consider something like that. But if they have not made the threshold, you’ve got a problem,” the source said.

Insiders have told the M&G that attempts by Makoele to ask questions about why the audit advice was ignored prompted a witch-hunt against him, which later saw him suspended. “The main one that ticked them off was this diesel [tender],” a source close to Makoele said.

“Because he [Makoele] was at a stage where he was seeking legal opinion, because he had to have it [the contract] set aside. Because if you don’t set it aside, it becomes a problem — it’s irregular expenditure and then questions come, even from the mayor, to say why was nothing done about it,” the same source said.

Makoele was suspended in May pending investigations into his alleged failure to abide by supply chain management policies.

Nkabinde said Metrobus could not divulge the charges Makoele faced, but confirmed that a disciplinary hearing was scheduled for next week.

“The charge sheet was delivered to Sabata Makoele on Tuesday August  15 2017. This is an internal matter pertaining to employee-employer relations and is strictly confidential,” he said.

In the 2015-2016 financial year, Metrobus received a grant of more than R400‑million from the City of Johannesburg. Auditor general Kimi Makwetu flagged the irregular use of these funds in his 2015-2016 audit report, which found that the municipal entity had failed to take reasonable steps to prevent irregular expenditure.

“Goods and services of a transaction value above R200 000 were procured without inviting competitive bids, as required by supply chain management regulation. Deviations were approved by the accounting officer, even though it was not impractical to do so,” the auditor general said. 



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