Treasury battles SOEs for tender documents amid mammoth review

Cape Town – Three state-owned entities - SAA, SABC and Transnet - as well as the Department of Public Enterprises, have not supplied Treasury with documents for its tender review process.

This was revealed by Finance Minister Pravin Gordhan in a Parliamentary response this week.

The Office of the Chief Procurement Officer has been reviewing all tenders above R10m since June 2015 across government and its entities to ensure compliance with procurement rules.

Gordhan said that all the entities have been cooperating except the above entities, who had not submitted documents.

On SABC, Gordhan said the scope of review is on seven contracts. “These include Asante Sana Consultants, Sekela Xabiso Consultants, Lezaf Consulting, MOT McDonalds Lift Maintenance, Price Water House Coopers Consulting, Lorna Vision and Fixed Term Contractor.”

He said Treasury is still awaiting documents which have not been submitted. “The review has not yet commenced, as we have not received the documentation,” he said.

On SAA, Gordhan said he was “waiting for (the) chairperson and board to grant permission and therefore the review has not commenced”. He added that the review has also not started because Treasury has “not received the documentation” from SAA.

On Transnet, Gordhan said the scope of review is on a contract awarded to McKinsey, Regiment Capital and Trillian.

Mail & Guardian reported in September 2016 that Transnet paid over R600m to Regiment Capital and Trillian for consulting work without a competitive tender.

“Transnet allowed the companies to piggyback on a contract they did not bid for,” the paper reported. “A R10m slice of work awarded to Regiments was increased by tens and then hundreds of millions of rands without a further tender, and then Trillian was paid tens of millions more for work earmarked for Regiments.”

Trillian is the company that allegedly knew about Nhlanhla Nene’s firing as Finance minister months before it was announced in December 2015. Its new chairperson, Tokyo Sexwale, announced in October that he would launch an independent investigation to fully test the veracity of the allegations.

The only report that has been finalised is the review of the Department of Correctional Service, in which Treasury discovered that it had signed-off on a contract for R378m to supply and maintain an integrated inmate management system.

EXCLUSIVE: R378m prisons tender scandal

“The review was finalised without receiving any comments from the department,” Gordhan said.

Briefing Parliament's Standing Committee on Appropriations in April, Chief Procurement Officer Kenneth Brown said: "We did [an] assessment and we saw the tender should have been awarded for around R50m."

As such, Brown instructed the prisons department to cancel an "irregular" tender.

Reviews that have started but whose reports have not been finalised include Prasa, Eskom and the Lepelle Water Board.

“The coal contracts of Eskom happen to fall within the category of contracts that are above R10m,” Treasury said in February.

Gordan said on Wednesday the scope of Eskom’s review, which started in July 2015, was for coal and diesel contracts and said the review of the coal contract was completed on 31 October 2016.

After a tussle over certain coal tender documents Eskom had failed to hand over to Treasury, it eventually conceded in August.

"National Treasury started an investigation into Eskom contracts with Tegeta in July 2015," Eskom said in a statement in August. "Eskom wants to reiterate that it has been cooperating with National Treasury. Since then ... Eskom has been responding to National Treasury requests."

READ: Eskom gives in to Treasury on coal report