Taxpayers to pay R346.5m more for Prasa tenders, says losing bidder — but agency says they're 'just disgruntled'

The Passenger Rail Association of SA's award of two major tenders means it will be paying more than double what it needs to upgrade two of its dilapidated depots.

This is an unnecessary R346.5m for the taxpayer, according to engineering firm Gibb in court on Wednesday. Gibb asked the Johannesburg high court to put an urgent halt to the implementation of the two contracts, pending a full ventilation of its dispute with Prasa about who should have been awarded the crucial tenders which will ensure there is appropriate infrastructure to match the new trains that the agency has been buying.

But Prasa, which awarded the tenders to GladAfrica Consulting Engineers, says Gibb is merely a “disgruntled bitter loser” and had no case. GladAfrica, on the other hand, did not oppose the temporary interdict sought by Gibb, but said it would fight for its tender when the case was fully argued.

The GladAfrica group is already beleaguered with a report earlier this month that Sars would attach the assets of GladAfrica Management Services for R88m in unpaid taxes. It also had a R9bn contract with Tshwane cancelled in 2019 after the auditor-general found that it was irregular.

Meanwhile, the court papers reveal that the two depots are falling apart.

In his answering affidavit, GladAfrica’s Technical Services MD Rajendran Pillay highlighted aspects of the company’s July condition assessment reports, which said that the Salt River depot in Cape Town was no longer compliant with regulations and “and the lack of adequate firefighting and fire detection is a major concern”.

In relation to the Springfield depot in Durban, similar concerns were raised, with hazardous material apparently contaminating surface water which then drained into the stormwater system, non-compliance with occupational health and safety laws, and “the fall risk in numerous locations is very high”.

According to the court papers, if the Gibb tender had been accepted, Prasa would have paid just under R238m for the work — which was to design and oversee the refurbishment and upgrade of the two depots. GladAfrica’s tender will cost about R584.4m.

But Prasa said Gibb did not qualify for the work because it did not meet the technical evaluation threshold. When it tendered, it was supposed to attach reference letters from former clients for work done that showed capacity to handle a job of such magnitude and which specified  “the value and type of work performed”.

Though Gibb did attach reference letters, they did not contain the value and type of work. 

Gibb acknowledged that the reference letters it attached did not contain that information. But said the bid documents, as a whole, did contain that information.

Indeed, a number of the reference letters came from Prasa itself, said Gibb’s counsel Richard Moultrie SC, adding that Prasa’s approach to the bid documents was to take a “blinkered view” at the letters.

“We are being asked to play a silly game,” said Moultrie.

But counsel for Prasa, Kgomosoane Mathipa, said the requirement was an important one. Its purpose was to ensure that the information was being provided “independently of what you [the bidder] are saying; in other words, from third parties.”

Moultrie argued that the contract between GladAfrica and Prasa, which came about as a result of the tenders, was also unlawful. This was because, while GladAfrica had said in its tenders that it would partner with German company Deutsche Bahn Engineering & Consulting, by the time it signed the contract all the German engineers named in the tenders had “miraculously” disappeared.

Instead, GladAfrica had asked Gibb what it would charge to do that work, said Moultrie. In affidavits, Gibb’s Sean Molloy said GladAfrica is now advertising posts with job descriptions that had apparently been “cut and paste” from Prasa’s tender advert.

Moultrie said it was “absolutely inescapable that Deutsche Bahn are no longer part of this”, yet Prasa signed contracts that were “fundamentally different to the bid that was proposed”.

Mathipa said that the tender bid process had to be assessed on its own terms. What happened afterwards was a “contractual issue” between GladAfrica and Prasa, but “it doesn’t make the tender process unlawful.”

Mathipa argued that once Gibb did not make it past the technical evaluation threshold, the fact that it offered a lower price was irrelevant.

He told the court that Prasa and GladAfrica were “right in the middle of implementation” of the contracts, being in stage three of the process, arguing against an interdict at this stage. But Moultrie disputed this saying that the real work had only really just begun.

Moultrie said that the reason Gibb was able to offer a much lower price was that it had already done the work under stage one and two in 2013 when it undertook the conceptual plans for the depot upgrades.  “This whole thing is our design,” he said.

Acting judge Stuart Wilson reserved judgment.

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