Sanral tenders: Chair not fazed by challenges to new scoring system

The South African National Roads Agency (Sanral) is undeterred by major construction companies’ high court challenge of its new procurement system.

In an address at an event to celebrate Sanral’s 25th anniversary in Cape Town on Friday night, Sanral board chair Themba Mhambi said defiantly that the court action by the construction companies will not deter Sanral from pursuing real transformation of the sector.

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Mhambi stressed that it is time for black South Africans – Africans, Indians and Coloureds – who had previously been excluded from benefitting from massive infrastructure projects to benefit alongside the well-established industry players.

However, Mhambi said contrary to media reports, Sanral does not want to destroy the major construction companies but will support and strengthen them while also pushing them to transform.

‘Don’t believe the lies’

“We are going to damage Sanral if we destroy the big construction companies we have in South Africa, like WBHO, Murray & Roberts, Haw and Inglis (H&I), and so on,” said Mhambi.

“If we destroy them, we will be destroying Sanral and South Africa.

“Therefore, don’t believe all the lies that are told that we want to kill these construction companies.

“We don’t want to do that. We want to support them. We want to strengthen them to get more business but there is one condition. That condition is that they must understand that South Africa belongs to all who live in it, black and white,” he said.

Mhambi stressed that those people who have in the past been excluded from benefitting from road construction, bridge building, pavements, manufacturing of guard rails, the production of asphalt must now benefit as well.

He said that is the condition – and that the condition does not come from anywhere other than the Constitution of South Africa.

“When these millionaire and billionaire companies say to us ‘we are going to take you to court Sanral because you are depriving us of the millions and billions that we are making alone’ I understand what they are saying, because you can’t be a millionaire or billionaire by sharing” he said.

“They are going to resist sharing.”

Mhambi’s comments follow two construction companies independently of each other obtaining high court interim interdicts stopping Sanral from implementing a controversial new scoring system for some of its tenders pending the finalisation of applications to review and set aside the new system.

Interdicts

The High Court in Gqeberha granted H&I Construction an interdict stopping Sanral from proceeding with the adjudication and award of two specific tenders in accordance with the amended tender scoring system as advertised by Sanral on 19 May 2023 in an addendum to its tender document.

Nine construction companies submitted affidavits in support of H&I’s application, including Stefanutti Stocks, Power Construction and Baseline Civil Contractors.

The High Court in Pretoria granted construction and infrastructure company SMEC South Africa an interim interdict stopping Sanral from proceeding with and/or implementing and/or giving effect to the outcome of the tender adjudication process related to a list of 65 bids to tender invitations.

H&I Construction argued that Sanral’s new scoring system is unconstitutional and irrational and the changes to the scoring system were introduced without consulting those directly affected by it and is therefore reviewable both on grounds of legality and in terms of the Promotion of Administrative Justice Act (Paja).

Legal position

Judge Nyameko Gqamana said in the High Court in Gqeberha accepted that Sanral is empowered in terms of the Preferential Procurement Policy Framework Act (PPPFA) to determine its own preferential policies and has a discretion to make its own policy choices regarding the specific goals it wishes to pursue.

The judge said the transformation agenda by Sanral to ensure broader black participation is commendable, a step in the right direction, and long overdue – but the policy has to be fair, lawful and rational.

“What troubles me more is that the changes to the scoring system [were] introduced without consultation,” said Judge Gqamana.

SMEC SA said the new scoring system renders the Broad-based Black Economic Empowerment Act (B-BBEE) a nullity and compliance with the PPPFA is undermined because compliance now only amounts to a fraction of the points.

The company said all the money companies spent to obtain a high B-BBEE score would now also mean nothing.