R10m more? Transport’s dodgy tenderThursday, 21/06/2012 - 10:42
By Chantelle Benjamin
The office of the public protector and the Department of Transport (DOT) have responded to Corruption Watch's forensic report, which raised questions about the tender process and a possible conflict of interest related to a multimillion-rand Department of Transport Investor Conference held last year.
"The Department of Transport has noted a report by Corruption Watch in relation to the department’s erstwhile investor conference. The department views any allegation of corruption in a serious light and is committed to address elements of corruption whenever they surface. We are aware of this complaint and other processes related to it," the department said.
"The office of the public protector has already made contact with the department regarding this issue and we are cooperating with the process. We are also currently engaged in processes internally to address the issue."
Meanwhile, the public protector, to whom Corruption Watch submitted the preliminary report last week, has acknowledged receipt. "Corruption Watch handed over the file on the alleged irregular transport tender, together with two other files and a list of 25 other cases," said Momelezi Kula, executive manager of outreach, education and communication in the office of the public protector.
"The understanding was that the public protector would conduct a further investigation and come to her own independent findings on the matter. The public protector's investigation has commenced, but is at an early stage," said Kula.
Two losing bidding companies immediately lodged complaints with the DOT after Global Interface Consulting, which put in a tender for R13.6-million, was announced as the winner. This was a much higher bid than those submitted by the objecting competitors.
Indigo Design and Event Marketing, after receiving no response despite repeated requests to DOT for an explanation for the selection and access to documents, such as the minutes of the bid committee’s discussion, lodged a case with Corruption Watch.
Despite these objections, Global Interface Consulting hosted the Cape Town conference held from 13 to 15 June 2011. On 21 June, just over a year after the conference was held, Corruption Watch submitted its report to Public Protector Thuli Madonsela, in which it recommends a “full-scale investigation” be held into the awarding of the contract to Global Interface Consulting.
The preliminary report by Corruption Watch highlights a number of concerns about the tender process, including the fact that Global Interface Consulting, sister company to Global Interface, is a relatively new business, having registered on 5 July 2009, while Indigo Design has a longer history. Losing bidder Indigo Design also submitted a substantially lower bid at R3.9-million, approximately R10-million less than the winning bid.
There is also a possible conflict of interest, with Global Interface Consulting’s parent company Global Interface having done business for the DOT in the previous 12 months. This was allegedly not revealed in the bid document submitted to the DOT, as required.
Corruption Watch’s investigation has revealed that Global Interface Consulting’s share certificate lists Pat Nyathi as a 95% shareholder. He is also a director of Global Interface.
Global Interface, which has a long history of offering clients an “integrated communication” solution, lists on its website the National Department of Transport as one of its clients, as well as South African Tourism, the Department of Water Affairs and Forestry, the Electricity Distribution Industry, and the Mpumalanga Provincial Government.
Corruption Watch was unable to ascertain whether the Department of Transport was aware that it was doing business with Global Interface Consulting’s parent company because the DOT, despite phone calls and emails, failed to respond to a list of questions Corruption Watch sent it on Wednesday 20 June.
The questions included whether DOT had investigated Indigo Marketing’s complaint, lodged well over a year ago, or been informed of a possible conflict of interest with the parent company, or even if the department had conducted any investigation or taken any action against any officials within the department.
Researchers at Corruption Watch believe that the preliminary investigation has raised sufficient questions about the tender to warrant a full-scale investigation into, among other things, whether there had been any collusion or improper conduct “between the company in question and officials in the department”.
Global Interface Consulting had allegedly not completed the tender document in full, as required by the General Conditions of Contract, and the documents were also allegedly submitted using the business profile of the more established Global Interface.
Then there is the fact that price made up 90 of the 100 points to be considered when evaluating proposals.
This not the first time that Global Interface Consulting has found itself at the wrong end of a tender dispute.
According to the government’s Tender Bulletin, and Global Interface Consulting’s website, where the company lists its current projects, the company won the contract for the 13 to 21 December 2010 multimillion-rand World Youth Festival, which reportedly had a number of teething problems.
The National Youth Development Agency’s chairman Andile Lungisa, as head of the organisation which ran the event, has since denied that it was awarded to Global Interface Consulting, telling Sapa on 15 December that the company had “failed to deliver and was therefore not assisting in any way in the 10-day festival”.
At the time, objections to the selection of Global Interface Consulting as winner bidder centred around the fact that 10 days were allegedly given for bidders to put forward proposals, and that Global Interface Consulting was not registered with the Companies and Intellectual Property Registration Office.
Efforts to obtain comment from Pat Nyathi were unsuccessful, with an official from Global Interface saying Global Interface Consulting had “signed a confidentiality agreement with the Department of Transport which might require that any comment comes from the department”.
The other losing bidder, Omega Investment Research, which put in a tender for R6.7-million, informed Corruption Watch that it had submitted 23 emails, the bulk to the DOT, objecting to the awarding of the tender, to which it had yet to receive a reply.
About 700 investors and delegates attended the Department of Transport International Investor conference in June last year, which was intended to encourage public-private partnerships projects focusing largely on the areas of rail and infrastructure development.