COEGA SETS THE RECORD STRAIGHT ON ITS ROLE IN THE TNPA HIGH SECURITY FENCING PROGRAMME

The Coega Development Corporation (Coega) takes immense pride in its role as a leading public entity rendering Infrastructure Implementing Agency (IA) services, and responsible for multi-billion rand infrastructure development and maintenance projects in South Africa. Coega has 24 years of expertise in infrastructure development and maintenance, including the development of Africa’s leading 9003ha Coega Special Economic Zone (SEZ), in Gqeberha, in the Nelson Mandela Bay Municipality, says Dr. Ayanda Vilakazi, Coega's Head of Marketing, Brand and Communications.

To effectively execute its services across the country, Coega has offices in the provinces of the Eastern Cape (Gqeberha, East London and Mthatha); KwaZuluNatal (Durban); Gauteng (Pretoria); and the Western Cape (Cape Town), providing infrastructure project management services, development and maintenance, and business consulting services.

As a state-owned organisation, Coega is registered as a Schedule 3D Public Entity in terms of the Public Finance Management Act (PFMA) (Act 1 of 1999), as amended, and is mandated to, inter alia, provide IA services, which enables it to respond more effectively to the provisions of Sections 41(1)(h) and 238 of the Constitution of the Republic of South Africa, which calls for co-operation among Organs of State and allows Organs of State to delegate their functions to other Organs of State on an agency basis.

Based on this mandate, Coega’s appointment as a trusted IA of Choice for various infrastructure projects includes, amongst others, the R4,2bn Tshwane Automotive Special Economic Zone, adjacent to Mamelodi Township; the R1bn Cecilia Makiwane Hospital, in Mdantsane; the R600m Anton Lembede Mathematics, Science and Technology Academy in La Mercy, north of Durban; and the Transnet National Ports Authority (TNPA) Fencing Programme.

Coega has a wide range of other public sector clientele including government departments (at national, provincial, and local levels), and state-owned entities (at national and provincial levels). As such, in 2020, Coega was identified in the South African Economic Reconstruction and Recovery Plan (ERRP) as one of the IA's to be designated for certain key projects.

Specific to the TNPA, Coega started providing assistance to the organisation on the implementation of its infrastructure projects as early as 2008, where the projects implemented included the: (i) Culvert - road culvert to accommodate stormwater runoff from Zone 1 of the Coega SEZ; (ii) Medium Voltage Substation and Cabling to supply the Port of Ngqura and other Port tenants with electricity (2010 / R13m); and (iii) Civil Works for Zones 7 and 10 of the Coega SEZ – Municipal Infrastructure on Coega land to service the TNPA Tank Farm east of the Coega River (2013 / R80m).

Coega's appointment as an IA on the TNPA Fencing Programme, which has been widely reported in the media recently, complied with the applicable legislative processes, as required for all Organs of State. This included, amongst others, the conclusion of a Service Delivery Agreement (SDA) between Coega and the TNPA in August 2021, resulting in the finalisation of the appointment of Coega as an IA on behalf of the TNPA.

This was in line with the provisions of Sections 41(1)(h) and 238 of the Constitution and also responds to the requirements of the Framework for Infrastructure Delivery and Procurement Management (FIDPM) issued in terms of the National Treasury Instruction No.3 of 2019/2020, section 5.4 (7) (a) (iv), which requires conclusion of agreement where Organs of State provide agency services to one another.

The SDA stipulates that Coega will provide support to the TNPA in the provisioning of Project/Programme IA services towards the implementation of various infrastructure projects and associated services, as would be identified by the TNPA from time-to-time.

Since the signing of the SDA with the TNPA, Coega commenced the implementation of several projects, including the erection of high-security fencing at four ports around the country: the Ports of Richards Bay, Durban, Ngqura, and Saldanha. It is important to note that one of the roles of an IA is to undertake the procurement processes to secure the required service providers for the project/s to be implemented on behalf of the entity it provides IA services to, and manages such contracts until the expected deliverables are realised. The same approach was followed in the case of the engagements with the TNPA, as reflected in the SDA between the two public entities.

Coega’s Supply Chain Management (SCM) processes comply with the PFMA of 1999 (Act No. 1 of 1999), as amended, and Treasury Regulations, and are underscored by good governance principles that eliminate conflicts of interest, bias, corruption and promote fairness and ethical conduct.

In preparation for the implementation of the TNPA’s high-security fencing projects, Coega engaged in a planning process with the TNPA’s Technical Team that was involved in the project development stage to ensure, amongst others, that the scope of the project was appropriately assessed by its experienced built environment professionals against the client’s budget, timeframes, and quality. To satisfy itself in terms of the scope and feasibility of the projects, Coega conducted site visits to the Ports to validate the project scope as provided by the TNPA, including the lengths of the required fencing, as per the work orders.

The high-security fencing requirements, 2.7m in height, were as follows: Port of Richards Bay, 31.233km; (ii) Port of Durban, 22km; (iii) Port of Ngqura, 9.833km; and (iv) Port of Saldanha, 15.8km.

At the time of the appointment by the TNPA, Coega already had a duly approved Fencing Framework Agreement in place (Database of Fencing Service Providers with tendered rates for various items used in a fencing project). Therefore, the three contractors that were appointed for the TNPA high-security fencing projects were sourced from Coega’s Fencing Framework Agreement (Framework Panel of Fencing Service Providers) based on the approved scope and budget, as agreed by the TNPA. The Fencing Framework Agreement was compiled by Coega following an open tender process where bidders provided rates for the different scope elements advertised. For each project awarded to Coega, a Quantitative Assessment (Price and Specific Goals (BBBEE)) was conducted with the allocation of the project being done in line with the criteria for the Fencing Framework Agreement.

The indicative budget that was provided by the TNPA's Technical Team for these four projects was approximately R320 million. To ensure value for money and the identification of savings, robust negotiations with each of the bidders were undertaken to achieve a reduction in the total cost. Following these robust engagements, the negotiated total cost for the four ports was approximately R309 million, as reflected in the signed work orders.

It is important to indicate that the budget of R90 million for the high-security fencing projects and related ancillary services reported in the media is inaccurate, malicious, and misleading, as this budget would not suffice for a project of this magnitude and scope. From the onset, the TNPA approved work orders allocating the projects were for R309 million. Coega was never advised of the reported budget of R90 million.

Regarding the implementation, currently, the projects are at different stages of completion, with the work at the Port of Saldanha at practical completion, while the Ports of Durban and Richards Bay are at 80% and 65% completion, respectively. The Port of Ngqura project has been delayed due to environmental issues, which have since been resolved. Coega expects the work delivered to meet the required quality standards.

In conclusion, as a public entity, Coega is subjected to strict annual audit processes by the Auditor-General of South Africa (AGSA), on the work it does in the development and operation of the Coega SEZ as well as the services it renders to government departments and other clients in the public and private sector, as an IA of Choice. Furthermore, Coega has received clean audit reports for four consecutive financial years (2019/20 – 2022/23), indicating that all processes abide by the applicable legislative and regulatory requirements. In fact, the TNPA Fencing Programme formed part of last year's audit by the AGSA, devoid of any findings.

Coega remains poised to continue providing professional IA services to the TNPA and other clients, assisting them towards the realisation of strategic goals and business objectives. Coega is ISO certified and has won no less than 20 local and international awards of excellence. In addition, Coega is recognised by clients in government and the private sector, built environment industry experts and by the communities it serves, as a leader in industrial development, operations, and a beacon of hope in terms of socio-economic development, while ensuring accountability, ethical conduct, and integrity in line with its organisational values, concludes Dr. Vilakazi.