Govt gives directions on council tender procedures

Source: Govt gives directions on council tender procedures – Sunday News Jul 10, 2016

Vusumuzi Dube Municipal Reporter
THE Government has instructed all local authorities to ensure that all works within their jurisdiction be it infrastructural development, service delivery, Private Public Partnerships and joint ventures go through a tender system rather than through private negotiations. The directive could see a number of major projects which the Bulawayo City Council was handling being thrown into jeopardy after it went ahead with some of them without going through the tender process. The projects include the multi-million dollar waste-to-energy deal which the local authority agreed on with United Kingdom-registered firm Pragma Leaf Consulting.

Another project that is set to be affected is the phase two of Emhlangeni suburb development where the council wanted to partner Stelix Civil Engineers and Contractors for the servicing of 541 medium-density stands. The renovation of the Basch Street Terminus commonly known as Egodini could also be under the spotlight after the Ministry of Local Government, Public Works and National Housing raised questions on the manner in which the local authority handled the tender.

According to a circular sent to the council by the parent Ministry’s Permanent Secretary, Engineer George Mlilo, the ministry will now not be able to facilitate the regularisation of deals struck by local authorities that are outside the formal tender process.

Eng Mlilo further warns that any contract entered into on the basis of an unsolicited bid will be deemed unprocedural and will be dealt with accordingly.

“The State Procurement Board has stated that all major projects must be awarded through a properly advertised and adjudicated tender procedure, regardless of which company “discovers” the project or opportunity. The best way forward in this matter is for each council to have available a prospectus of all development, service delivery, partnership opportunities and if an interest is shown in any area, the council would then advertise the opportunity which would be open to every bidder,” reads part of the circular.

Eng Mlilo said the move has been necessitated by the sudden increase in the number of companies, both local and foreign based, who were looking to do business with local authorities in the country. In responding to the directive — BCC said the directive could have a negative effect to developmental initiatives within the local authority especially from an investment perspective, noting that the tender process was cumbersome and stifled innovation.

“The circular from the Perm Sec is clear. This will stall projects which are already under discussion between council and project implementers and will have negative impacts on the development of the city. The Pragma Leaf Project will be affected by this circular,” Health Services Director Dr Zanele Hwalima is quoted as saying.

Engineering services director, Engineer Simela Dube also noted; “The projects that are affected in my opinion are Stelix-Emhlangeni Phase 2, there is also currently a proposal to allocate selected contractors for servicing land of which there was no criteria on how they were selected.”

The $65 million Pragma project has been mired in controversy ever since it was first tabled at the council chambers with councillors initially rejecting it but it was then resubmitted to councillors under unclear circumstances. The proposed $68 million waste-to-energy plant is expected to produce 110 000 litres of bio-diesel and 2,2 megawatts of electricity.

The council said the UK registered company has already finished a feasibility study for the project. As part of the agreement, BCC said the investor had plans to bring additional refuse removal compactors to help improve garbage collection.

The council said Pragma had also indicated that its operations would not use potable water as they would obtain and purify waste water. It is also believed that if operating at full capacity, an estimated 2 000 jobs would be created for refuse collectors, processors, sorters and some 120 professionals. Additional jobs will also be created in downstream industries. The envisaged project would convert waste to energy and distill diesel, which council would have first option to purchase at $2 per gallon or 50 cents per litre.

The tender for the rehabilitation of Egodini has also been under spotlight with questions raised on the period the local authority had taken to negotiate the deal amid allegations that senior council officials were linked to the company awarded the tender.

The rehabilitation, which was initially meant to start in January 2014, has experienced a number of false starts, with both the local authority and the contracted company reportedly not committing themselves to the commencement of the project.

South African civil engineering firm Terraccotta Private Limited won the tender ahead of two other local companies to upgrade the terminus, a project that is expected to gobble close to $60 million.