Cape Town drives into bus fury

Procurement: ANC wants investigation of lucrative contract given to Chinese manufacturer

20 November 2017 - 06:45 By ARON HYMAN and Philani Nombembe
The city of Cape Town. File photo
The city of Cape Town. File photo
Image: Sharief Jaffer

Barely a year after a delegation, including close associates of the Cape Town mayor, set up meetings with executives of a Chinese manufacturer of electric buses, the company won a tender valued at over R300-million.

TimesLIVE has established that arrangements were made for Patricia de Lille to meet with BYD management in China but one of her officials warned against it because the company was in the running for the lucrative contract.

Her spokesman, however, confirmed that she had gone to China in 2015 with deputy mayor Ian Neilson and director of trade and investment Lance Greyling, but would not reveal why. The tender for the electric buses was only advertised in February 2016.

It was the city's transport commissioner, Melissa Whitehead, who tried to arrange for De Lille to meet with the company.

“Can you kindly provide me with the names of your members accompanying you in order for me to schedule the meeting with mayor on 27 August 2015,'' an email from Whitehead's office manager to BYD country manager, Brian Li, reads.

Now the ANC is calling for an investigation. In 2015 Whitehead also copied Brett Herron, transport mayoral committee member,  in an email to Li informing him about city officials intentions to visit the company in China.

“I refer to the meeting that BYD had with the City of Cape Town and your subsequent correspondence early in May,’’ Whitehead wrote.

“There would be a delegation of 3 and possibly 4, inclusive of Councillor Brett Herron, myself and James Groep.”

“It would be essential that we can at this meeting include investigations as I have detailed above and explore that first step which would be to secure approximately 10 buses as a pilot for Cape Town,” she continued.

TimesLIVE has seen a draft agenda - dated August 27 to September 2, 2015 - which revealed that Whitehead, Herron and Greyling were set to have dinner with BYD executives.

A senior city official, who asked to remain anonymous, confirmed that the parties had met. BYD will supply the city with 20 electric buses, set to hit the road next year. Over R30-million has already been paid to the Chinese.

A DA councillor said: “They went to brief them (BYD). That is what is fundamentally wrong about this process.”

And a CEO of one of the local bidders, who wished to remain anonymous, said: “The length of the bus was so specific that it was exactly the length to the millimetre of the BYD bus.”

GridCars managing director Winstone Jordaan said they, unlike BYD, “had no contact” with officials other than the ''formal tender meeting.”

Mayoral spokesman, Zara Nicolson, said De Lille did not meet the businessmen after being warned.

City manager, Achmat Ebrahim, explained that BYD SA was awarded the tender in August 2016 “following the usual and prescribed supply chain management process”. But ANC councillor Bheki Hadebe said: “We want the city to conduct a forensic investigation into the awarding of this tender and the involvement of the commissioner and the office of the mayor before the tender was awarded.”

This is not the only tender controversy.

This not the only allegation threating to tarnish the city’s images as the “best run municipality”. UK law firm Stephenson Harwood is alleged to have been irregularly appointed to help set up the city’s transport authority in 2012 – pocketing R6.4-million that year alone. Whitehead is again at the centre of the storm.

Four local bidders for the transport authority contract - including ODA Tess Joint Venture - quoted between R3 million and R10-million but their bids were found to be “non-responsive”.

In a letter to Ebrahim, the bid evaluation committee said they had cancelled the bid because “there was no South African company to perform the work”,  and had approached Stephenson Harwood and at a cost of R6.4-million. But the city official said “all those companies are competent. Melisa’s presence in these processes are irregular.”

ODA Tess director Nico McLachlan said the city told them that the tender had been cancelled. But he insisted his company had “the requisite knowledge, skills and experience to provide the service”.

“A letter of cancellation is different to a letter informing a bidder that his bid was unsuccessful,” said McLachlan.

One of Stephenson Harwood experts, Stephen Chandler, was debarred by the World Bank last year for alleged $65-million fraud committed in Argentina in 2012.

Andrew Rieley, spokesman for the law firm, said that they had since parted ways with Chandler.

Whitehead denied allegations of wrongdoing.

“The City issues tenders for the procurement of goods and services. It is up to any company and service provider to bid for these tenders,'' she said.

Ebrahim also clarified that when she travelled to China she was on a “fact-finding mission'' for the electric bus tender and that “similar investigations were done in the United Kingdom and Europe''.