Statement issued by Minister of Transport, Mr Fikile Mbalula, on the occasion of the media briefing on the adjudication of SANRAL tenders held on 23 May 2022 at 10h00

23 May 2022

We have taken note of the reports relating to the cancellation of 5 tenders with a collective value of R17.4 billion. These are strategic projects that are critical in growing our economy as part of our investments in infrastructure. 

Good governance is a key tenet of our service delivery mandate and we will not compromise its underlying principles for expediency. 

We have learnt invaluable lessons from the advent of state capture which brought to the fore lapses that paralysed strategic organs of state through rampant corruption that was left unchecked for too long. 

We have seen at PRASA how the malfeasance and irregular contracts compromised service delivery and delayed the implementation of its modernization programme by close to a decade, with major contracts held up in the courts.  Today, we are still paying the price for those irregularities and corrupt practices.

SANRAL is a strategic State-Owned Company that plays a major role in building and managing our national road network that drives our economy and connecting our centres of economic activity to the markets.  It remains one of our best performing entities with a good track record on delivering mega projects.

The SANRAL Board, as its Accounting Authority, is bound by its fiduciary duties in terms of the SANRAL Act, the Companies Act and the Public Finance Management Act. 

The Board must, at all times, act in the best interest of the company.

SANRAL is responsible for major projects that are critical in giving forward momentum to economic recovery and growth.  The track record of SANRAL over the two decades of its existence has given us comfort that it has the requisite capacity and skills to execute its mandate.  We have no reason to believe otherwise.

I have directed the Board to provide me with a detailed report in line with its responsibilities as enshrined in the relevant laws. 

The Minister has no role in the procurement processes and we have no interest in the identity of the bidders.  Our only interest is to ensure that the Board has given expression to the letter and spirit of the SANRAL Act and other applicable prescripts in the exercise of its responsibilities. 

Furthermore, the strategic nature of the projects in question requires of us to ensure that governance principles are not undermined, and that the adjudication process can withstand scrutiny. 

We must do everything in our power to ensure that the integrity of the award process is not brought into question.  Failure to uphold supply chain management principles will result in awards being challenged in courts, holding up the implementation of the projects.  We have first-hand experience at PRASA on such litigation that has the potential to hold up projects for years.  Those who are aggrieved by the decisions of the Board in this regard have recourse in law and can approach the courts to adjudicate the matter.

It is my intention to hold the Board accountable for its decisions and to ensure that it acts in the best interest of the company and the country. 

The strategic nature of the projects SANRAL is responsible for require that the company be circumspect in handling procurement matters and ensure probity in the award of contracts.  I will therefore not hesitate to act against the Board if there is evidence that the Board was derelict in the execution of its fiduciary duties. 

It is equally my expectation that the Board will not hesitate to implement consequences management against those found culpable for the lapses that have resulted in the decision not to award these tenders.

In conclusion, it is in our collective interest for SANRAL to find a remedy to the adjudication lapses that considers the strategic nature of these projects and minimize the delay leading to the award of these tenders.  We are unequivocal in our resolve not to tolerate malfeasance for expediency in any of our entities.

The Board will take the nation into confidence on the decisions it has taken in relation to these tenders and the steps it intends to take in addressing the procurement lapses.

I thank you.

Issued by Department of Transport, 22 May 2022