The Department of Environmental Affairs (DEA) is currently awaiting the findings of an investigation by a special audit committee relating to the use of consultants during the awarding of the construction and maintenance tender for its new R8-billion green offices.
This followed the release of a report by the Auditor-General (AG) Terence Nombembe last year, which raised concerns around a R10.5-million contract awarded to the Mi3 Consortium to act as a public–private partnership (PPP) adviser during the procurement and bidding process.
The AG noted that the final consultant contract amount increased by R1.5-million from the original figure of R9-million, as the consortium did not have environmental and heritage specialists, which had to be outsourced for an additional R1.5-million.
These services were procured by means of a variation order.
In addition, the AG reported that a comparison of the actual against the proposed deliverables indicated delays of up to 1 445 days.
“We don’t know if there were any irregularities in this regard; however, we are being as open as we can by providing all information relating to the cost and timelines of our new headquarters,” DEA COO Lize McCourt told a media briefing on Monday.
DEA project manager Imbulaheni Edwin Maseda explained that tender-related price variations could be largely attributed to the fact that the original estimated project costs were for a conventional building.
“The project for the construction of a conventional commercial building for the department was established in 2005. However, in 2009, the scope of the project changed as the former Department of Environmental Affairs and Tourism split into two separate units, and the newly formed DEA decided to develop an environment-friendly building according to its mandate. This increased costs,” he said.
He further emphasised that all adjustments to the original budget were approved by the National Treasury.
Project Specifications
On June 26, 2012, a 25-year, R8-billion construction and maintenance PPP agreement was signed between the DEA and private sector participant, Imvelo Concessions, with the objective of delivering a 4-star Green Building Council of South Africa-rated office block.
This included the construction of the 27 422 m2 premises according to strict environment-friendly specifications, including enabling the capping of electricity consumption at 115 kWh a year.
In addition, the contract stipulated that construction should enable 30% less water consumption than that of a comparable conventional building and sustainable building materials were to be incorporated into the general construction.
McCourt stressed that the building would not cost R8-billion to construct, but that the scope of the tender included longer-term maintenance and service requirements over a 25-year period.
“This amount includes the private sector partner providing 25 years of maintenance for the building, including everything from tea services to cleaning, health and safety and garden maintenance. It even includes the cost of relocating the entire department from its current premises,” she said.
Maseda noted that the project was running on schedule, with the construction end date declared as May 31, 2014 and occupation set for June 1, 2014.