Johannesburg - Trade and Industry Minister Rob Davies is standing by his decision to snub the operators of the national lottery by awarding the new contract to a newly formed consortium, Ithuba.
Davies’s decision is being challenged in court by Gidani, which failed to secure the contract a second time.
Ithuba Holdings was awarded the licence to operate the lottery after an exhaustive tender process.
Bidders had paid a R2.5 million non-refundable fee to bid.
Gidani has asked the High Court in Pretoria to interdict Davies from awarding the licence to Ithuba, pending its court application for a review.
Gidani, which was awarded the second national lottery contract in 2006 – the first was awarded to Uthingo – has also asked the court to interdict Ithuba from doing anything that would give effect to the licence.
At the centre of Gidani’s argument is a recommendation by the National Lotteries Board that the licence be awarded to Gidani.
The board’s recommendation was based on a report by the evaluation committee.
According to the Lotteries Act, the final decision rests with the minister, after he has consulted the board and received advice.
Papers filed with the court give weight to Gidani’s bid, showing that more money would be given to the National Lottery Distribution Fund, which supports worthy charities.
However, Davies’s assessment disputes this, finding that Ithuba would pay out more in rand, whereas Gidani’s bid cited only a percentage of turnover.
Davies has said the process of appointing the operator has become much more elaborate, to avert a repeat of the scenario in which a long court battle led to the the lottery being suspended for six months.
When Gidani was named the winning bidder in 2006, Uthingo challenged this.
In his responding affidavit presented in court on Friday, Davies says the National Lotteries Board recommended Gidani despite its not having scoring higher points than its rivals during the bidding process.
According to Davies, Ithuba scored highest in the technical and financial examinations carried out by the evaluation committee.
The report of the evaluation committee was handed over to the adjudicating committee, which comprised only members of the National Lotteries Board.
The board was not happy with the evaluation committee’s financial evaluation of the bids, but after moderating the scores, Ithuba scored the highest points in the technical and financial evaluations.
The board proceeded, however, to recommend that the minister award the contract to Gidani, saying its projected revenues were more realistic than those of other bidders.
“I also note that the adjudication committee’s report recommends that Gidani be awarded the licence,” Davies said.
“However, (this) report shows that this was not a unanimous decision, but one reached effectively by majority vote and not based on the adjudication committee’s moderated scoring.”
Davies also rejected what he said appeared to be suggestions by Gidani that there was an irregularity in his decision to deviate from the board’s recommendation.
“If this is so, which is by no means clear, I reject the suggestion,” Davies said.
“Such a suggestion is not in line with the provisions of the Lotteries Act, in terms of which I am empowered to decide as to which applicant should be awarded the licence.
“The final discretion is mine.”
Davies asked the court to dismiss Gidani’s application with costs.
Judgment has been reserved until this week.
Ithuba Holdings is also listed as a respondent in Gidani’s court challenge, along with the National Lotteries Board and two other losing bidders, Mzansi Games and Grand Lottery.
The Sunday Independent has reported that the Ithuba Consortium includes among its shareholders the National Education, Health and Allied Workers Union’s investment arm.
The consortium is chaired by businessman Seth Phalatse and prominent businesswoman Charmaine Mabuza.
They have refused to comment until all the negotiations and processes have been resolved and finalised.
Sunday Independent