Buffalo City Metro’s delay in awarding a tender for hiring plant and earth-moving equipment has cost the city an additional R46-million in the space of nine months.
Some 22 companies have benefited from the expenditure, with some getting more than R7-million while the lowest paid business received R21380.
A metro document seen by the Daily Dispatch shows one company that traded under two names, cashing in a total of R2.7-million.
A BCM source said this was wasteful expenditure – it was still not clear when the tender would finally be awarded.
“The delays in awarding such tenders led to these expenditures.
“Some companies were earning more than or close to R1-million a month. We can see the money escalating to over R80-million. We are now at and what about April, May and June?”
BCM spokesman Keith Ngesi confirmed the payments, saying that based on a motivation submitted by the director of engineering services and supported by the general manager of supply chain management (SCM), a deviation was approved by the accounting officer and submitted to council.
“Based on the reconciliation done by the finance directorate, R40-million has been spent on vehicle and plant hire between June 2014 and December 2014, and R6-million has been spent between January 2015 and March 2015,” said Ngesi.
This tender, one of the most lucrative tenders in the municipality, was said to be worth close to R80-million annually. It is mainly for hiring of plant equipment and vehicles for the municipality’s engineering and solid waste sections.
It may include graders, excavators, water tankers and trucks and was normally awarded to a number of companies, with their plants being used as and when needed.
The source said the tender had expired last May and on June 2, BCM issued a deviation memo to hire plant until the tender was awarded.
Many of the companies who were awarded the work under the deviation order were “regular beneficiaries” of BCM tenders, said the source.
“More than ten companies here have won multimillion-rand tenders for different contracts. the tender could save the metro millions,” the source said.
Ngesi said the metro was dealing with backlogs in the evaluation and adjudication of tenders and would implement strategies to deal with these backlogs.
“It can be confirmed the new tender has not yet been awarded due to delays encountered in the evaluation of tender processes. It is envisaged the award process will be concluded in May,” he said.
He said no reports had been received by BCM municipal manager Andile Fani about challenges with the contract.
“The accounting officer, however, has previously requested the chief financial officer provide details to management about this contract as it is a key contract supporting solid waste management and engineering services. The CFO had committed to prepare and table the report but this has not happened,” said Ngesi.
Another Dispatch source blamed the delays on poor decision-making and “changing of tender committees”.
Ngesi confirmed changes were effected to all the tender committees.
“These changes were done in line with the legal provisions of the Municipal Finance Management Act and SCM regulations to improve the effectiveness and efficiency of the committees.” — bonganif@dispatch.co.za
BCM tender delays cost city R46m
Some 22 companies have benefited from the expenditure, with some getting more than R7-million while the lowest paid business received R21380.
A metro document seen by the Daily Dispatch shows one company that traded under two names, cashing in a total of R2.7-million.
A BCM source said this was wasteful expenditure – it was still not clear when the tender would finally be awarded.
“The delays in awarding such tenders led to these expenditures.
“Some companies were earning more than or close to R1-million a month. We can see the money escalating to over R80-million. We are now at and what about April, May and June?”
BCM spokesman Keith Ngesi confirmed the payments, saying that based on a motivation submitted by the director of engineering services and supported by the general manager of supply chain management (SCM), a deviation was approved by the accounting officer and submitted to council.
“Based on the reconciliation done by the finance directorate, R40-million has been spent on vehicle and plant hire between June 2014 and December 2014, and R6-million has been spent between January 2015 and March 2015,” said Ngesi.
This tender, one of the most lucrative tenders in the municipality, was said to be worth close to R80-million annually. It is mainly for hiring of plant equipment and vehicles for the municipality’s engineering and solid waste sections.
It may include graders, excavators, water tankers and trucks and was normally awarded to a number of companies, with their plants being used as and when needed.
The source said the tender had expired last May and on June 2, BCM issued a deviation memo to hire plant until the tender was awarded.
Many of the companies who were awarded the work under the deviation order were “regular beneficiaries” of BCM tenders, said the source.
“More than ten companies here have won multimillion-rand tenders for different contracts. the tender could save the metro millions,” the source said.
Ngesi said the metro was dealing with backlogs in the evaluation and adjudication of tenders and would implement strategies to deal with these backlogs.
“It can be confirmed the new tender has not yet been awarded due to delays encountered in the evaluation of tender processes. It is envisaged the award process will be concluded in May,” he said.
He said no reports had been received by BCM municipal manager Andile Fani about challenges with the contract.
“The accounting officer, however, has previously requested the chief financial officer provide details to management about this contract as it is a key contract supporting solid waste management and engineering services. The CFO had committed to prepare and table the report but this has not happened,” said Ngesi.
Another Dispatch source blamed the delays on poor decision-making and “changing of tender committees”.
Ngesi confirmed changes were effected to all the tender committees.
“These changes were done in line with the legal provisions of the Municipal Finance Management Act and SCM regulations to improve the effectiveness and efficiency of the committees.” — bonganif@dispatch.co.za
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