Treasury team cans ‘too cheap’ contract
Millions wasted after squad sent in to save Limpopo from bankruptcy lands province with R700 000 a month bill
A NATIONAL Treasury team sent to rescue Limpopo from bankruptcy failed to conclude a contract that could have saved taxpayers millions.
A Sunday Times investigation has established that the team, led by former Eastern Cape treasurer Monde Tom, is now costing the impoverished province R700 000 a month after cancelling a R250-million deal because the successful bidder was too cheap for its liking.
The team was sent by former finance minister Pravin Gordhan to sort out Limpopo’s tenderpreneur looting crisis that left the province more than R2-billion in debt.
Gordhan appointed Tom as the treasury administrator, Mzwandile Matthews as the education administrator, Tiny Rennie as the health
They had inside information of the price . . . provided by the others and they were undercutting that
administrator, Mathabatha Mokonyane as roads and transport administrator and Mbuyi Dondashe as public works administrator.
In August last year, the team stopped a R3.9-million-a-month medical waste contract being awarded to the cheapest service provider, Buhle Waste. It extended the current deal — also with Buhle Waste and worth R4.6-million a month — by a year. Three extensions in the past six months have cost taxpayers more than R4-million.
The team’s delay in awarding a R100-million hospital laundry contract has since last year forced thousands of patients in the province’s 40 hospitals and 500 clinics to use dirty linen and hospital clothing, or keep on their own clothes (see report, right).
Documents show that the team cancelled the medical waste contract in October 2013, two months after the Limpopo health department’s bid adjudication committee awarded it to Buhle.
This week, the Treasury said the contract was cancelled because the tender specifications were too vague and had been tailored to suit Buhle, which had undercut its competitors by being privy to confidential pricing information from supply-chain management officials.
Tom said 11 of the 12 bidders were eliminated on technicalities and only one company went through.
“It was almost tailored to suit a particular company,” said Tom.
“They had inside information of the price . . . provided by the others and they were undercutting that.”
However, minutes of the bid adjudication committee show that none of the bidders were eliminated for failing an administrative assessment. Some were allowed to proceed to the next stage despite having administrative compliance issues.
The bids were assessed on the basis of administrative compliance, request for proposal, technical evaluation and then price and BBBEE points. Treatment facilities, containers, transport, training, tracking systems, staff and licences for the waste treatment facilities were among the key requirements.
The same specifications, which are almost identical to the ones used in North West, Gauteng and KwaZuluNatal, were used to adjudicate tenders in Limpopo for the past decade.
Buhle was awarded the tender after its competitors failed to qualify at the technical evaluation stage.
The intervention team claimed it was not involved in the entire tendering process, but that the final decision was referred to it for review in October last year.
“They started the process and concluded it. But at the point where it needed to be approved . . . that’s where this was picked up,” said Tom.
However, documents seen by Sunday Times reporters paint a different picture. They showed that Rennie signed off on a letter to the Limpopo treasury’s supply-chain management unit asking permission to advertise the tender on May 29 last year. Minutes of the April 24 2013 tender-specification committee meeting showed that Loykinsoonlal Ramsook represented the national Department of Health, which is part of the interministerial team, at the gathering.
His appointment letter said he was there “to serve as a member of the specification, technical evaluation and inspection committee in relation to the above-mentioned bid”.
The tender is now the subject of Buhle’s bid in the High Court in Pretoria to set aside the contract cancellation and force the task team to award the tender urgently. Buhle has also written a letter to Health Minister Aaron Motsoaledi asking for his intervention.
“My reason for taking them to court is that they are paying me more than it is necessary and I am not happy with that because it’s actually wasteful expenditure, according to Treasury regulations,” said Buhle owner Phetole Sekete.
He said claims that Buhle had ben-
I think there are people who have an interest . . . somebody in the group is interested in the project
efited from tailored specifications and inside information on pricing made no sense because all the bidders submitted sealed tenders on closing day on July 23 last year.
“I think they are looking for an excuse,” said Sekete. “What I can tell you is that I think there are people who have an interest in the project. I think the guys who are doing the administration have got issues. Somebody in the group is interested in the project.”
He said that he had tendered for less because his new, R11-million treatment plant in Limpopo had enabled his firm to cut down on transport costs to Johannesburg, Port Elizabeth, Durban and Klerksdorp.
“Now that we have our own treatment facility in Seshego, we have been able to pass that cost saving over to the department,” said Sekete.
The businessman said the administrators had refused to give Buhle the quality assurance report used to cancel the contract.
The secretary of the Forum of Limpopo Entrepreneurs, Shiviko Mabunda, has accused Tom of looking for excuses not to award the tender to Buhle. He said this was “proof” that the intervention team perpetuated tender irregularities instead of stopping them.
Tom dismissed Mabunda as a “bitter” man who made unsubstantiated allegations because tight procurement processes introduced by the team made it difficult for him to get tenders following due process.
Limpopo government spokesman Phuti Seloba said the intervention team had “done an excellent work”.
“Remember where we were in 2011. It was bad. This province would have been a gone entity,” said Seloba.
When the team took over, Limpopo was saddled with a R1.7-billion overdraft, R2.7-billion in accumulated overspending and R1.1-billion in unpaid invoices. The team has reduced unpaid invoices to R79-million and has a budget surplus of R4.4-billion.