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Pretoria – Dithering over the award of some R9bn in tenders for the construction of four prisons could imperil public private partnerships (PPPs) as a business model, industry leaders say.
PPPs are partnerships between government and the private sector aimed at accelerating the supply of sorely needed infrastructure in South Africa.
Tenders for the new prisions, which were submitted in May last year, have apparently not even been opened even though they are due to lapse on November 30.
Business people say if these tenders are eventually scotched, the appetite of the private sector and interested parties worldwide for PPPs could dry up.
Many of the country’s foremost construction leaders, and other business people, are extremely frustrated at the shilly-shallying in awarding the four tenders for the design, construction, maintenance and operation of four prisons for the Department of Correctional Services.
After four months, it came to light that Nosiviwe Mapisa-Nqakula, the newly appointed correctional services minister, had questioned the inclusion of custodial services in the PPPs, and had suspended the process.
The four tendering consortiums were, however, not informed.
In July this year, Mapisa-Nqakula asked the consortiums for suggestions to amend the tenders to include only design, construction and maintenance of the building itself, but not the guarding, rehabilitation, development and care of prisoners.
These proposals were to have been submitted within two weeks, but were in no way formal and detailed tenders.There has since again been a deathly silence, said one of the business people concerned.
The formal position is that the tenders submitted in May are valid until November 30.
Should government decide to leave the custodial services out of the PPP, various observers reckon it could ask the current bidders for an extension or adjustments to their tenders.
This would, however, render the viability study completed in 2005, as well as the treasury approvals, worthless.
The study would have to be repeated based on the new model and approval would again have to be obtained.
This would lead to further delays and additional expense.
By September last year, government’s expenditure on deal advisers had run to at least R20m.
If the tenders lapse the process will have to start from the beginning again.
The business people are unhappy, as they each had had to pay a R3m deposit with their bid, which would have been lost had they failed to comply with the bidding conditions.
Furthermore, preparing the bids cost each consortium an estimated R20m to R30m.
-Sake24
PPPs are partnerships between government and the private sector aimed at accelerating the supply of sorely needed infrastructure in South Africa.
Tenders for the new prisions, which were submitted in May last year, have apparently not even been opened even though they are due to lapse on November 30.
Business people say if these tenders are eventually scotched, the appetite of the private sector and interested parties worldwide for PPPs could dry up.
Many of the country’s foremost construction leaders, and other business people, are extremely frustrated at the shilly-shallying in awarding the four tenders for the design, construction, maintenance and operation of four prisons for the Department of Correctional Services.
After four months, it came to light that Nosiviwe Mapisa-Nqakula, the newly appointed correctional services minister, had questioned the inclusion of custodial services in the PPPs, and had suspended the process.
The four tendering consortiums were, however, not informed.
In July this year, Mapisa-Nqakula asked the consortiums for suggestions to amend the tenders to include only design, construction and maintenance of the building itself, but not the guarding, rehabilitation, development and care of prisoners.
These proposals were to have been submitted within two weeks, but were in no way formal and detailed tenders.There has since again been a deathly silence, said one of the business people concerned.
The formal position is that the tenders submitted in May are valid until November 30.
Should government decide to leave the custodial services out of the PPP, various observers reckon it could ask the current bidders for an extension or adjustments to their tenders.
This would, however, render the viability study completed in 2005, as well as the treasury approvals, worthless.
The study would have to be repeated based on the new model and approval would again have to be obtained.
This would lead to further delays and additional expense.
By September last year, government’s expenditure on deal advisers had run to at least R20m.
If the tenders lapse the process will have to start from the beginning again.
The business people are unhappy, as they each had had to pay a R3m deposit with their bid, which would have been lost had they failed to comply with the bidding conditions.
Furthermore, preparing the bids cost each consortium an estimated R20m to R30m.
-Sake24
