Johannesburg - The Mpumalanga department of public works acted unlawfully and improperly in the awarding of tenders for shop leases in Pilgrims Rest, and the process was characterised by gross irregularities and maladministration, Thuli Madonsela, the Public Protector, has found.
The report, entitled “Poisoned Processes”, was released on Thursday night after an investigation lasting more than a year. It was due to be released two weeks ago but was delayed due to “quality assurance processes”.
It says the head of department must cancel the awarding of the contracts for the new shop leases and embark on a new procurement process.
Pilgrims Rest, a national heritage and a tourist attraction, is peculiarly owned by the department. On June 30, 2012, it issued eviction notices to 17 out of 22 business tenants, who had to vacate their premises by the end of July 2012.
The history of the department owning this tiny village with only one main road is very odd. The history of Pilgrims Rest dates back to the 1800s, when it was a gold mining town. At some stage when the mining activity stopped, the Transvaal Provincial Administration (TPA) took over from the mining company Barlow Rand.
When the TPA was dissolved in 1994, the town was handed over to the department. It has a mandate to provide, manage and maintain Pilgrims Rest, which was declared a heritage site and a national monument in 1986.
It is responsible for the management of the town, as well as the billing on water, electricity, refuse removal, management of businesses and lease agreements.
The eviction orders followed a tender process conducted by the department for the renewal of tenders, which it said was based on the need for transformation.
Susan Patricia Khoza’s Matletle Construction and Projects company was awarded a tender to rent five business premises, while Rachel Tsakane Khoza’s Timbhulu Construction and Projects was awarded a tender to rent three business premises.
The losing bidders obtained an interdict at the North Gauteng High Court against the Mpumalanga government, which was given two months to produce the documents upon which basis the tenders were awarded for a judicial review by the court.
During the hearing, Judge Stanley Makgoba asked the advocate for the evictees: “This is strange to me. How can a provincial department own a town?”
The government did not comply with the court order. Afrikaans pressure group Afrisake is now funding an application by the evictees to have the interdict extended. The public protector’s report found that the bid specification committee was without the requisite 60 percent quorum.
The report says this committee gave a high score for price to a bidder whose bid price was one of the lowest. “The bid was adjudicated and scored on the understanding of its rent offer being R19 000, when in fact it was R10 416,” it says. Therefore, fraud is suspected.
* No due diligence exercise was carried out to assess the functionality and sustainability of businesses considered for leases;
* Evaluation criteria changed from 90:10 to 80:20 for some of the tenders, with dubious reasons given for such a change and how the change was processed; and
* No proper records were kept, resulting in a changing narrative given during the investigation on issues such as why the evaluation criteria changed for some of the tenders.
Madonsela says the department must ensure that owners of current businesses that are not successful in the new bidding process are given adequate vacation notices, which should not be less than three months.
The MEC must within 30 days from the date of the report submit an implementation plan of the remedial action to Madonsela and 21 days thereafter submit a progress report.
Sharon Paterson, who owns two businesses in Pilgrims Rest – the Pantry Shop, which sells pastries and doubles up as a licensed restaurant, and Ponieskrantz Arts and Crafts, said six businesses had already closed because of the uncertainty over the leases.
“Opening up a new procurement process could take years, and at the end of the day you do not get your lease renewed. They should just renew the leases and open up the bidding process on the empty buildings,” she added.