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SAICE questions fresh Sanral tender awards as China scores most of the work

8th November 2022

By: Irma Venter

Creamer Media Senior Deputy Editor

     

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The South African Institution of Civil Engineering (SAICE) says it is “deeply concerned” by the recent awarding of tenders by the South African National Roads Agency Limited (Sanral) to joint ventures (JVs) led by foreign companies. 

Sanral earlier this year cancelled five of its major tenders owing to “a material irregularity in the tender process”, where a resolution made by its board in January 2020 was not implemented in the evaluation of the affected tenders.

Sanral board chairperson Themba Mhambi explained that the five cancelled tenders had one thing in common – the absence of the implementation of a resolution of the Sanral board regarding the separation of duties.

Four of the five tenders, which were cancelled in June, have now been awarded following an evaluation process by the Development Bank of Southern Africa.

A decision on the Gauteng open-road tolling tender operator has been put on hold pending resolution on key issues around the future of tolling in the province.

In the new tender round, the R4.05-billion Mtentu Bridge project, on the N2 Wild Coast road, was awarded to the China Communications Construction Company (CCCC) Mecsa JV.

The R1.23-billion rehabilitation of the R56 Matatiele rehabilitation project, in the Eastern Cape, was awarded to Welkom-based Down Touch Investments.

The R2.44-billion N3 Ashburton Interchange, in KwaZulu-Natal, was awarded to the China State Construction (CSC) Base Major JV, along with the N2/N3 EB Cloete interchange improvements project, in KwaZulu-Natal, valued at R5.02-billion.

Base Major is based in Gauteng, and led by Stephen Lu.

SAICE notes that it has a number of concerns regarding the new awards, and that it has raised these concerns with President Cyril Ramaphosa in an open letter to his office.

These concerns include whether there were no South African companies capable of leading these JVs.

“What will the impact on the economy and the engineering fraternity be as a result of the appointment of foreign firms leading these JVs?” adds SAICE.

“Also, what is the potential negative impact on employment, job creation and skills development for South Africans?”

Another concern is whether the successful bidders will comply with local procurement regulations in support of local content and the use of locally sourced materials for these projects.

“Also, who will provide oversight from government to ensure compliance with local procurement targets?” notes SAICE.

SAICE president Professor Marianne Vanderschuren says she is concerned by the potential impact and cost to the economy and all South Africans. 

“In light of the fact that this country has significant work to do in enabling economic recovery, the awarding of up to R6.65-billion worth of SANRAL tender funds to foreign contractors is disappointing. 

“Although South African tenders usually call for the use of local materials, and labour, can we be sure that these requirements will be honoured by foreign companies, as experiences throughout the rest of Africa do not suggest this?”

Sanral told News24 that CCCC and CSCEC were registered on the Construction Industry Development Board register and the National Treasury's central supplier database, and that both firms submitted empowerment certificates.

Also, as with all Sanral contracts, the roads agency said the winning bidders must comply with mandatory local content requirements, as well as with all applicable regulations and legislation, in particular environmental, labour and health and safety requirements. 

SAICE has a membership base of more than 15 000 civil engineering professionals.

 

Edited by Creamer Media Reporter

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