The City of Tshwane has suspended a dodgy contract worth R35 million in the municipality, after whistle blowers approached civil action group, Outa, with a bounty of data around the company involved.<\/p>\n
According to Outa, a source provided the group with data on a tender won by\u00a0Tahal South Africa, which was awarded on 22 April 2015 for a price of R30 million excluding VAT.<\/p>\n
The tender’s official name is \u201cThe identification and packaging of catalytic interventions and projects required to fast-track the development of East Capital to realise the required economic growth\u201d – a name which was essentially nonsense, Outa said, designed to confuse people and reduce the possibility of competing bidders.<\/p>\n
“In simple terms, it\u2019s a feasibility study.” it said.<\/p>\n
According to the documents received by Outa, planning for a\u00a010-month tender\u00a0started in April 2013, where\u00a0an initial tender advert request was drafted with a budget estimate of R8 million.<\/p>\n
After a highly irregular tender process – where all competing bids were disqualified and Tahal SA’s bid received a score of 100% on each evaluation criterion – the contract was awarded to the company for three years.<\/p>\n
Outa said that the evidence it was handed shows that 20% of the contract cost was filtered off to “consultants” from a company headed by one of Tahal SA’s directors.<\/p>\n
Other payments were also reportedly made to businesses where Tahal SA directors held sole directorship.<\/p>\n
Most damning, Outa said, was that virtually the entire project was sub-contracted to another company for R1.5 million.<\/p>\n
“Sub-contracting the bulk of a contract is irregular and it is unclear why Tahal SA was paid R30\u00a0million if the actual work could be done for just R1.5\u00a0million,” Outa said.<\/p>\n
“This contract was for a preliminary feasibility study, raising the possibility that it was to have been the gateway to a substantially larger contract which would also have gone to Tahal SA.<\/p>\n
“Tahal SA\u2019s financial records from November 2015 to April 2016 show that the company had little income other than from the City of Tshwane contract, which raises queries about whether it was a going concern and why it was hired,” the group said.<\/p>\n
According to Outa, the City of Tshwane has now suspended the contract, pending further investigation.<\/p>\n