Mayor’s mystery tender
Mayor’s China freebie angers DA leaders after city issues R1bn ‘smart-city’ tender
● DA leaders want Tshwane mayor Stevens Mokgalapa to explain why the metro issued an invitation to tender for a R1bn “smartcity” — apparently tailored to suit Chinese tech giant Huawei — while he was on a trip to China at the company’s expense.
While Mokgalapa and four of his officials were being wined and dined in China by Huawei, his officials back home were preparing a tender that information technology experts said would suit Huawei products.
The tender row is not Mokgalapa’s first brush with DA leaders, who pride themselves on clean governance and hold the party as a model for the ANC to follow. The DA runs Tshwane in partnership with the EFF.
Tshwane was gridlocked for three days at the end of July when workers went on strike in protest against the 18% salary increases granted to metro group and divisional heads. The city eventually reached a R318m settlement with the workers, later criticised by DA federal executive chair James Selfe.
Although there is no indication that Mokgalapa personally benefited, the China junket has embarrassed the party’s national leaders and exposed it to criticism usually directed at free-spending ANC mayors.
Selfe said the party only found out about Mokgalapa’s trip the day before he left. He said Mokgalapa had not obtained the requisite party approvals to travel, which is a violation of DA federal executive policy.
“I know nothing about the issuing of the contract. I know he went to China at the invitation of that company, but the requested approvals were not obtained from the party before he left. That is a matter we are in discussion about. He will have to provide an explanation,” Selfe said.
He would quiz Mokgalapa about the tender, because a mayor should not involve himself in procurement processes.
“I will take the matter up with the executive mayor and I will ask for the tender specifications. As you know, the executive mayor has nothing to do with the awarding of tenders,” Selfe said.
Mokgalapa was adamant that his trip to China will not influence who gets the tender.
His spokesperson, Omogolo Taunyane, said: “As with all tenders, this one is open to the public, with any interested party being encouraged to apply. There is no intention to award Huawei this or any other tender as a result of mayor Mokgalapa’s recent trip.
“To link the mayor’s trip as an exchange of any gratuities or information pertaining to this tender is an erroneous and irresponsible insinuation to make.”
Taunyane said the party had never communicated its unease about the venture to the mayor.
“Whatever the party is unhappy about whatever the mayor is doing, they should communicate that to his office. We cannot respond to the party in the media,” she said.
An industry expert as well as a senior
Tshwane official said there was a risk that circumstances could compel local ICT firms bidding for the tender to buy the hardware from Huawei.
“The specifications are structured in a way where SMMEs will never make it past the compliance stage,” said the expert, who asked not to be named.
“Huawei is a multinational, it can’t bid for government contracts, but it’s probably screening potential partners. The big guys will always get preferential treatment so it’s pointless for the smaller guys to compete.”
But Huawei strongly denied this, insisting that it has no business dealings with the City of Tshwane.
Huawei said in a statement that the purpose of the trip was to showcase its innovative ICT solutions to stakeholders.
“This practice is not uncommon in the competitive ICT sector,” it said.
“Huawei prides itself on complying with local laws and regulations in all markets we operate in. Huawei’s code of business conduct prohibits any employees from undertaking any activities that breach any laws, or engage in unethical business practices.”
It said its solutions were aimed at solving problems facing cities and their citizens, such as traffic congestion, high unemployment, crime, and environmental degradation, by making cities safer and smarter.
It said its smart-city experience was open to people from around the world.
The trip was undertaken at the invitation of Huawei’s sales executive in SA, Samuel Cheng.
He invited the Tshwane bosses to “visit our HQ in Shenzhen and also the smart-city demo sites in China”.
He said the company would pay for all sightseeing, hotels and ground transportation costs for the delegation, which flew via Hong Kong.
In Shenzhen, they visited Huawei’s manufacturing centre and then travelled to Shanghai to visit the company’s workshop. They also travelled to the Huawei Beijing Experience Centre. There, they visited demonstration sites where the company showcases its smart-city solutions.
The Tshwane delegation consisted of Mokgalapa, mayoral committee member for health Derrick Kissoonduth, his corporate and shared services counterpart Richard Moheta, head of the mayor’s private office Norman Mohale, and group head of shared services Musa Khumalo.
While they were in China, the City of Tshwane advertised the tender for the provision of “safe-city solutions”.
This includes the provision of specialised cameras with motion sensors to monitor emergencies, such as fires and traffic accidents as well as emergency services’ response tehnology.
The tender also makes provision for a control room, state-of-the-art telecommunications system for emergency response, a new data centre, as well as ongoing maintenance of the entire operation.
Industry experts told the Sunday Times this week that whichever ICT firm wins the tender would have no option but to procure all the hardware from Huawei — because no other telecoms company operating locally has the capacity to provide such equipment.
But a source sympathetic to Huawei said there were 10 other telecoms firms around the world, including Ericsson, Oracle and Cisco, that offer smart safety solutions.
The city said it had budgeted R26m for phase one of the safe-city solution tender, but declined to reveal what this entailed.
However, an independent industry expert, who spoke on condition of anonymity, said a project of this size — including components, licensing and ongoing maintenance — could run up to R1bn over three years.
“You are looking at a budget of R250m as a minimum and it can run upwards of R1bn. That R26m won’t even cover the licensing of the network,” said the expert.
The tender includes setting up a computer-aided dispatch call-handling system equipped with a display screen that allows an emergency call centre operator to electronically dispatch calls to emergency responders such as police, fire and ambulance services.
It will also have a GPS tracking locater to pinpoint where the emergency is being reported from, and will be linked to state-of-the-art CCTV cameras to show what is happening in real time.
Interested bidders have been asked to cost for the entire “safe-city solution” that includes a video surveillance system equipped with smart cameras, video analytics, video dispatch, video management and video conferencing.
It must incorporate a video wall with decoders, display screens and a multi-screen processing controller, as well as an integrated communication control system with the capacity for call-taking, dispatch and video capability.
Another item on the city’s wish list is an IT hardware and data centre with storage devices, a server and an operating system. Huawei provides this service to cities around the world.
Local government expert and former eThekwini city manager Mike Sutcliffe said such sponsored trips were problematic because there was always an expectation of some benefit at the end.
“If there is an argument that says there’s technology to investigate in a particular supply, let the city pay for that. The moment you get sponsored trips, someone at some point is going to expect you to pay them back,” he said.
The tender closes tomorrow.