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Transnet’s decision to award a tender for the supply of critical port equipment to a company whose directors are on trial for fraud was overturned by the High Court in Pretoria last week.
In late 2022, Transnet awarded Aqua Transport a contract to supply material handling equipment at the Richards Bay port, which was accused of defrauding the KwaZulu-Natal provincial government of R1.6 million. Part of the tender was awarded to Eyamakhosi, a one-man operation based in Richards Bay.
Disqualification
A third bidder, Radds Transport, which had supplied the equipment in question to the Richards Bay port since 2005, was disqualified by Transnet from the bidding process over an accusation it previously colluded on tenders. Radds’ bid was R112 million cheaper, and its price was assessed during the tender process as market-related. The same was not the case for the other two bidders.
Judge Sulet Potterill said in her judgment: “It must be remarked that Transnet’s defence of Aqua in court, despite the common cause adverse findings against Aqua, was most disconcerting. The appointment of Aqua was so unreasonable that no reasonable person could have taken such a decision.”
The court judgment has put Transnet’s procurement policies under the spotlight for the second time in a week after it emerged that it awarded a major security contract to a joint venture led by a one-man operation, also previously in trouble for allegedly ripping off a provincial government for millions.
The relationship between Transnet and Radds Transport extends back a decade, and Radds has previously won many contracts. The dispute over the tender in question dates back to a previous tender Radds won in 2019, after which a whistleblower alleged that Radds had colluded with another bidder because the two companies had directors who were married to one another.
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Rejection
However, Transnet rejected the claim and said it would not cancel the tender. But, three years later, when Radds bid for the tender in question, Transnet said it had set a process in motion to “restrict” Radds from doing business with it. The Treasury had also advised Transnet that Radds should be restricted.
But by the time the tender was adjudicated, the restriction process had not been concluded.
It nonetheless disqualified Radds from the tender and awarded it to Aqua and Eyamakhosi. Eyamakhosi then dropped out as it could not deliver on the contract.
In the court application, Radds asked the court to set aside Aqua’s award and award it to Radds.
In an unusual step, Judge Potterill granted the order, saying that the court was better placed than Transnet to award the tender.
“Upon consideration of all the facts, I am satisfied that the decision to exercise the award of the tender should not be left to Transnet,” she said.
