Johannesburg - A Gauteng-based company has asked the government to take away a R200 million tender from it, because the company never tendered for it.
LTE Consulting has asked the Gauteng Department of Human Settlements to put the brakes on the R200m tender for water and sewer reticulation construction in Sweetwaters, Kanana, south of Joburg.
It told the government the tender had been irregularly awarded to it as there was no open tender process.
Now, LTE’s board of directors are investigating what role their chief executive officer, Thulani Majola, played in getting the contract awarded.
The board of directors discovered that they had landed the multimillion-rand contract a month after it was awarded, and started asking questions. The Star understands that the company became aware of the contract after an engineer wrote an e-mail alerting the directors that this could have legal implications for them.
In a letter dated October 2, addressed to Human Settlements MEC Jacob Mamabolo, LTE legal adviser Gary Vantyi wrote: “Our appointment of approximately R200 million turnkey appointment, standing alone without any explanatory context, on the face of it appears to be irregular.
“Given the above, we sought assistance from the office of the HoD (head of department) with the view to rectify the said agreement and/or appointment.”
LTE’s group executive chairman and director, Asogan Pillay, said other board members learnt only in March that the company had landed the contract in February.
“This project is irregular. We do not want to be associated with dodgy deals as this would have legal implications for the company. It has to be rectified or we don’t want this contract,” Pillay said.
The department’s spokesman, Motsamai Motlhaolwa, said the matter was being investigated and “receiving attention in the department, and once all facts have been ascertained, we shall communicate accordingly.”
So far, R40m has been paid by the department to LTE towards the project.
In the letter, Vantyi proposed that Mamabolo “put the current project on hold, that is, to cease all the work until the contractual arrangements have been finalised.”
LTE Consulting board members wrote three letters to Mamabolo and the department’s HoD, requesting an urgent meeting about the contract.
They wanted the contract to follow the Public Finance Management Act (which promotes good financial management) in order to maximise service delivery through the effective and efficient use of the limited resources.
“We do not want to engage in irregular activities or be accused of corruption. We wanted to make it clear that we did not collude with any of the officials to get the contract in a manner that is questionable. This is going to taint our reputation. We are a company that has a good track record,” an official who wanted to remain anonymous said.
“We have never had to deal with a tender of this magnitude. Our core business is consultation. We once got a tender for construction during the World Cup, but it was not big,” the official added.
LTE provides consultation for engineering companies, but was strangely awarded a tender for the construction of water and sewer reticulation of 2 689 stands in Sweetwaters’ Kanana Park Extension 6, even though it does not have the capacity to do the work.
The board of directors were not aware they had landed the contract, but the letter of appointment was handed to its chief executive.
Majola appointed Khato Civils, a construction company, to do the work as LTE did not have the capacity to execute the project.
The contract had apparently been secured by Majola.
Pillay said Majola was mandated to secure contracts on behalf of the company. However, Majola had to inform the board and ensure that all the proper procedures were followed, because it could put the company at risk.
LTE has instituted an investigation into Majola to find out how he acquired the contract without following the proper procedures.
On February 13, Human Settlements head of department Magaret-Ann Diedericks wrote a letter to LTE informing them about the appointment.
“The department wishes to advise that your company has been provisionally appointed for the construction of water and sewer reticulation of 2 689 stands in Sweetwaters’ Kanana Park project on a turn-key development approach.
“The appointment is valued at R199 791 612 (one hundred and ninety-nine million seven hundred and ninety-one thousand six hundred and twelve rand only) including VAT.”
But Majola had already written a letter on February 11 to Khato Civils appointing them to do construction work in Sweetwaters, two days before the department informed LTE about the appointment.
The official said there was no open tender process as the company was not involved in a bidding process.
When The Star asked Majola about the letters written by LTE requesting a meeting with the department, he said: “There is no such.” Later, he conceded the company had approached the department to have the contract rectified.
The Star