The South African National Roads Agency Limited (Sanral) will cancel all existing advertised tenders that had not yet closed, issue new tender adverts, and subsequently adjudicate all tenders within the confines of the interim policy after its board withdrew its new Preferential Procurement Policy to avert lengthy court battles.
The new policy was adopted by the Board on May 23.
The construction industry has said the new polity would cost the economy billions of rands, and subsequently a legal salvo was fired.
Sunday World reported last month construction group SMEC went to the Johannesburg High Court to interdict Sanral from proceeding with and or implementing the outcome of the tender adjudication process.
The Citizen also reported the High Court in Gqeberha granted H&I Construction an interdict stopping Sanral from proceeding with the adjudication and award of two specific tenders in accordance with the amended tender scoring system as advertised by Sanral on May 19, 2023 in an addendum to its tender document.
Construction firm WBHO told Moneyweb, “Sanity will prevail in preferential procurement rules dispute’’.
Sanral said in a statement on Tuesday that it intended to commence a process on a date soon to be announced, where it sought to engage the construction industry and all relevant stakeholders to address meaningful transformation imperatives of the sector.
Themba Mhambi, the chairperson of the Sanral board, said the decision to withdraw the new Preferential Procurement Policy was taken by the board after careful consideration of developments since it was adopted.
“Following our adoption in May 2023 of a new Preferential Procurement Policy for Sanral, there have been a number of legal challenges to the policy, which were launched by construction companies in various courts across the country,” said Mhambi.
“The legal challenges to the new Preferential Procurement Policy have regrettably resulted in Sanral being prevented from proceeding with the processing of close to 80 tenders worth billions of rands, with significant negative consequences for the fulfilment of the constitutional and statutory mandate of Sanral.
“The board of Sanral has adopted the decision to withdraw the new Preferential Procurement Policy because of the negative impact these court challenges have, including the fact that we anticipate that the lengthy court processes will cause significant delays to the work of Sanral.”
Sanral’s board proposes, as an interim measure, pending the adoption of a finalised policy, to adjudicate all tenders in accordance with the scorecard.
Sanral will require, as a condition of contract, that successful bidders be required to ensure compliance with contract participation goals for targeted enterprises in targeted areas and labour as per the formula applied by the CIDB in terms of Government Gazette No. 4127 published in November 2017, as was applied before the introduction of the policy which is being withdrawn.
The CIDB is required in terms of the Construction Industry Development Board Act to establish the Register of contractors and Register of Projects. The register of contractors grades and categorises contractors according to their capability to carry out construction projects.
“In this regard, Sanral shall be inviting representations from stakeholders to make submissions on the content of the draft interim policy. The date and time when such representations should be made shall be announced shortly,” it said.
Sanral said it was advised by Senior Counsel that in light of the change in the scoring formula, it was necessary to commence the tender process afresh, a decision which had been reached with much angst in light of the urgent need for the services to be rendered.
“Sanral will, therefore, be cancelling all existing advertised tenders that have not yet closed, issue new tender adverts, and subsequently adjudicate all tenders within the confines of the interim policy. Sanral intends to expedite the re-advertisement of tenders and processing thereof within this current financial year,” it said.
Sanral’s CEO, Reginald Demana, said that infrastructure development as critical to South Africa’s economic growth and, in the wake of the Covid-19 pandemic, the country could not afford further disruptions towards the expansion and maintenance of the national road network and key arteries across the country’s provinces.
“Road and rail infrastructure are the lifeblood of our economy and, as such, any disruption to its maintenance, as well as any disruption to our extensive programme of new infrastructure projects, is a threat to our country’s economic growth,” said Demana.
He said a protracted legal battle between Sanral and the construction industry would have dire consequences not only for Sanral’s projects, which run into billions of rands, but would also be detrimental to the entire economy.
Demana said, “Clearly, it is not in the interest of Sanral, nor is it in the national interest, to delay our infrastructure build programme.
‘’It is clear then that roads altogether account for a very high level of all freight in South Africa”.