The awarding of a lucrative R117-million Buffalo City Metro contract to upgrade a 2.3km stretch of road has been mired in controversy.
This after questions were raised within the metro over why funds were being paid to a secondary partner in a joint venture to upgrade the Mdantsane Qumza Highway and not the lead company.
In September last year, BCM advertised the tender calling for the upgrading of the highway. It called for a company that had a Construction Industry Development Board (CIDB) grading of 8CE or Higher. CE stands for civil engineering.
Diphatse Trading and Projects cc had lesser grading of 7GB (general building) as well as a grading of 7CE with PE (potential emerging). In a bind, the company approached Sedtrade (Pty) Ltd, which had the required qualifications, to partner with them.
A Saturday Dispatch investigation has revealed a tussle between the two Gauteng-based companies and metro officials to see who can get their hands on the money first. To date the metro has paid out R6-million to the venture.
In a dramatic turnaround, one of the roadbuilders suddenly announced that they had withdrawn from the project in July. This twist comes after the Saturday Dispatch uncovered intense, behind-the-scenes shifts in tender documents relating to the joint venture between Sedtrade and Diphatse.
Saturday Dispatch has also seen two different joint venture (JV) agreements which were apparently signed by two companies. Both were submitted to BCM for the project, with the second JV being squeaked in a few hours before the tender closed.
The two agreements seen by BCM’s bid committees, reflected different share ownership percentages. In the one agreement, 60% of the share went to Sedtrade and 40% to Diphatse. However, a day later the agreement changed to reflect 55% and 45% for Sedtrade and Diphatse respectively.
However, despite Sedtrade being the lead company, money has been transferred to Diphatse JV.
Diphatse director Louis Maphutha yesterday said: “ I am not aware of such a agreement. I only had and know of one agreement”.
Yesterday, the CEO of Sedtrade, Zaid Dockrat, bluntly denied that they were even part of the project. He said: “We left the tender from the day it was awarded.”
An hour later, Dockrat changed his comment. Asked if Sedtrade were still working with Diphatse Trading, he replied: “Satisfactory, yes.”
Dockrat said they had employed 30 people for the project. “This figure however fluctuates,” he said.
Late Friday afternoon, Dockrat mailed a statement showing that on July 3 Sedtrade notified BCM that on June 29 the company decided to pull out of JV and the roadbuilding deal citing “current commitments and resource allocations”.
BCM spokesman, Samkelo Ngwenya said: “Unfortunately, we won’t be engaging on the detail of the joint venture contracts currently in motion except to say that it is a normal, above-board process that is legal and is accommodated within the prescripts of municipal acts”.
A BCM official anonymously told the Saturday Dispatch that in the second JV agreement, it was agreed that Sedtrade would be the lead partner and was authorised to “incur liabilities”.
“The company (Sedtrade) should receive instructions and payments and be responsible for the entire execution and administration of the contract for and on behalf of the partners in the joint venture.
“This is carried in the second agreement,” said the source.
However, the source said that in a twist it was Diphatse JV which became the first recipient of BCM’s roadbuilding money and not Sedtrade.
The source claimed that Diphatse was suddenly more “hands on” with the project and was behaving like the lead company. “What we ask now is why the money is paid to Diphatse but not to Sedtrade as per the agreements? Why is Diphatse suddenly the lead partner? We never get these answers,” said the source.
BCM’s Ngwenya confirmed that BCM has, so far, paid the JV R6.3-million for work done.
In an internal BCM e-mail, seen by Saturday Dispatch it was instructed that Sedtrade, the lead partner, should receive BCM’s money and be responsible for the project, and not Diphatse.
“The lead partner shall be Sedtrade and shall be authorised to incur liability, receive instructions and payments.”
Saturday Dispatch was told by a top BCM source that the money was paid to Diphatse and not directly to Sedtrade.
The e-mail also cites certain officials who were apparently “at their wits end” to get the money paid to Diphatse.
Maphutha, commenting on why the name Sedtrade was not used for the JV since it was the lead partner, said the agreement between the two companies was to use his company name for the JV. Maphutha said: “It’s not up to the municipality but up to us as we have agreed what name to use,” he said.
Ngwenya said: “The JV agreement of the parties provides who the amounts must be paid to and therefore it is an agreement between the parties of the JV and not BCM. So far BCM can confirm that it has paid R6 294 404.00.”
He said the project was behind schedule by a month.
“As the city we are not in panic mode over this yet, as we obviously anticipate that sometimes challenges that are beyond control like weather and strikes can happen. What is important is that the service provider is working seven days a week to catch up,” he said. — bonganif@dispatch.co.za
R117m Qumza upgrade project hits rocky patch
This after questions were raised within the metro over why funds were being paid to a secondary partner in a joint venture to upgrade the Mdantsane Qumza Highway and not the lead company.
In September last year, BCM advertised the tender calling for the upgrading of the highway. It called for a company that had a Construction Industry Development Board (CIDB) grading of 8CE or Higher. CE stands for civil engineering.
Diphatse Trading and Projects cc had lesser grading of 7GB (general building) as well as a grading of 7CE with PE (potential emerging). In a bind, the company approached Sedtrade (Pty) Ltd, which had the required qualifications, to partner with them.
A Saturday Dispatch investigation has revealed a tussle between the two Gauteng-based companies and metro officials to see who can get their hands on the money first. To date the metro has paid out R6-million to the venture.
In a dramatic turnaround, one of the roadbuilders suddenly announced that they had withdrawn from the project in July. This twist comes after the Saturday Dispatch uncovered intense, behind-the-scenes shifts in tender documents relating to the joint venture between Sedtrade and Diphatse.
Saturday Dispatch has also seen two different joint venture (JV) agreements which were apparently signed by two companies. Both were submitted to BCM for the project, with the second JV being squeaked in a few hours before the tender closed.
The two agreements seen by BCM’s bid committees, reflected different share ownership percentages. In the one agreement, 60% of the share went to Sedtrade and 40% to Diphatse. However, a day later the agreement changed to reflect 55% and 45% for Sedtrade and Diphatse respectively.
However, despite Sedtrade being the lead company, money has been transferred to Diphatse JV.
Diphatse director Louis Maphutha yesterday said: “ I am not aware of such a agreement. I only had and know of one agreement”.
Yesterday, the CEO of Sedtrade, Zaid Dockrat, bluntly denied that they were even part of the project. He said: “We left the tender from the day it was awarded.”
An hour later, Dockrat changed his comment. Asked if Sedtrade were still working with Diphatse Trading, he replied: “Satisfactory, yes.”
Dockrat said they had employed 30 people for the project. “This figure however fluctuates,” he said.
Late Friday afternoon, Dockrat mailed a statement showing that on July 3 Sedtrade notified BCM that on June 29 the company decided to pull out of JV and the roadbuilding deal citing “current commitments and resource allocations”.
BCM spokesman, Samkelo Ngwenya said: “Unfortunately, we won’t be engaging on the detail of the joint venture contracts currently in motion except to say that it is a normal, above-board process that is legal and is accommodated within the prescripts of municipal acts”.
A BCM official anonymously told the Saturday Dispatch that in the second JV agreement, it was agreed that Sedtrade would be the lead partner and was authorised to “incur liabilities”.
“The company (Sedtrade) should receive instructions and payments and be responsible for the entire execution and administration of the contract for and on behalf of the partners in the joint venture.
“This is carried in the second agreement,” said the source.
However, the source said that in a twist it was Diphatse JV which became the first recipient of BCM’s roadbuilding money and not Sedtrade.
The source claimed that Diphatse was suddenly more “hands on” with the project and was behaving like the lead company. “What we ask now is why the money is paid to Diphatse but not to Sedtrade as per the agreements? Why is Diphatse suddenly the lead partner? We never get these answers,” said the source.
BCM’s Ngwenya confirmed that BCM has, so far, paid the JV R6.3-million for work done.
In an internal BCM e-mail, seen by Saturday Dispatch it was instructed that Sedtrade, the lead partner, should receive BCM’s money and be responsible for the project, and not Diphatse.
“The lead partner shall be Sedtrade and shall be authorised to incur liability, receive instructions and payments.”
Saturday Dispatch was told by a top BCM source that the money was paid to Diphatse and not directly to Sedtrade.
The e-mail also cites certain officials who were apparently “at their wits end” to get the money paid to Diphatse.
Maphutha, commenting on why the name Sedtrade was not used for the JV since it was the lead partner, said the agreement between the two companies was to use his company name for the JV. Maphutha said: “It’s not up to the municipality but up to us as we have agreed what name to use,” he said.
Ngwenya said: “The JV agreement of the parties provides who the amounts must be paid to and therefore it is an agreement between the parties of the JV and not BCM. So far BCM can confirm that it has paid R6 294 404.00.”
He said the project was behind schedule by a month.
“As the city we are not in panic mode over this yet, as we obviously anticipate that sometimes challenges that are beyond control like weather and strikes can happen. What is important is that the service provider is working seven days a week to catch up,” he said. — bonganif@dispatch.co.za
Would you like to comment on this article?
Register (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Trending Now
Latest Videos