Described as one of the country’s biggest fleet tenders, the contract has irked tenderpreneurs who have raised concerns over how it was processed.
The original five-year contract was awarded to Avis Fleet in 2012 and expires at the end of this month. The city has to date spent R1.4bn on it.
However, it has accepted a fresh tender for R1.2bn with Afrirent Fleet, which would cover only 30 months and incur a loss of about R700m compared with the current deal.
This would go against the austerity measures introduced in the 2016/17 financial year that saved the city almost R500m and also reduced unauthorised expenditure.
The 2732 vehicles to be supplied by Afrirent would include sedans, bakkies and minibuses which would be utilised by various departments but mainly the metro police, City Power and Johannesburg Water.
A letter seen by The Star showed that the process was almost finalised and Afrirent stood to get R1.25bn.
Section 32 of the Municipal Supply Chain Management Regulation, also known as a piggybacking tender, was applied in the company’s favour.
The regulation addresses the requirements and conditions under which supply chain management policies of municipalities could allow their respective accounting officers to procure goods or services for the municipality under a contract secured by another organ of the state.
It was used in exceptional and emergency situations and aimed at minimising costs and red tape.
A letter from acting group chief financial officer Charity Wurayayi sent to Afrirent owner Senzo Tsabedze last week stated that the group had been chosen for the job.
“Kindly be advised that your offer in respect of the provision of the vehicle financing for non-specialised vehicles has been recommended by the executive bid adjudication committee at its meeting on September 25 and approved by the accounting officer on October 10.”
City spokesperson Nthatisi Modingoane said it was an interim measure to ensure services were not impeded while the city was trying to secure a long-term service provider.
Avis Fleet chief executive Albert Geldenhuys said: “We had tendered for the new contract but we were told on Tuesday it had been given to someone else.”
It has also emerged that the more-than 10 bidders were not informed about the outcome of their bids.
One said: “we only found out through word of mouth that a company was appointed. The council will waste about R700m because the appointed company will only work for 30 months instead of five years.”