Controversial SA tender for DRC
Tumi Makgetla and Cheryl Uys-Allie, Mail & Guardian 28/7/06
One of South Africa’s contributions to the Democratic Republic of Congo’s (DRC) elections has been shrouded in controversy. Air charter company Adagold Aviation charged the Department of Defence over R20-million more than its competitors to fly ballot papers from South Africa to the DRC.
These findings have raised concerns about tender irregularities in light of Adagold’s ties to a firm which was taken to court by a competitor this year for corruption in another tender award.
Adagold Aviation director Lawrence Pietersen is also a director of Ibhubesi Trading, a firm whose contract to provide ration packs to the South African National Defence Force (SANDF) came under public scrutiny this year.
In June 2006, the Pretoria High Court granted an interdict prohibiting the department from proceeding with the contract owing to tender irregularities.
The court found that Defence Secretary January Boy Masilela unfairly influenced the decision of the defence department’s procurement committee to give the tender to Ibhubesi, a company with no prior experience in food processing.
If Ibhubesi was found guilty of corruption in the tender process it could be barred from receiving further defence force tenders for a period of up to 10 years, said Hennie van Vuuren of the Institute for Security Studies.
In terms of the Prevention and Combating of Corrupt Activities Act of 2004, Van Vuuren said, Ibhubesi and its directors would be put onto a register of tender defaulters. Because of the director overlap between Ibhubesi and Adagold, the latter would also be barred from receiving defence contracts.
“It’s a big stick that hasn’t been applied, but if there is a legal process under way, [the SANDF] would need to consider that very carefully,” said Van Vuuren.
Adagold Aviation’s recent tender awards to deliver ballot papers to the DRC formed part of South Africa’s contribution to the DRC elections.
Aviation companies must be shortlisted by the SANDF to apply for tenders to provide air transportation and Adagold is one of five suppliers who are on the current list.
Adagold won a contract for R36,6-million to fly ballots to Kisangani, while its competitors tendered R18,9-million and R27,5-million respectively.
The company also won a tender to transport ballot papers to several other locations in the DRC for R19,3-million when its competitors charged R15,9-million and R16,2-million.
The difference between Adagold’s tender and its lowest priced competitors in these two instances amounts to R21,1-million. Adagold has also won tenders for other contracts at higher prices than its competitors in the past.
It won contracts to transport cargo to other African countries for a third more than its competitors, at a price of R1,2-million for one tender, and several hundred thousand rands more than its competitors for another contract, amounting to at least R900 000, or a third more than its competitors on different routes.
“Nice to know that it still takes a Rhodie to get the job done!” Adagold Aviation’s executive director Mark Warren Clark reportedly posted on an Old Rhodesian Air Force Sods mailing list about his company’s recent work for the SANDF. Adagold did not respond to questions about the meaning of this statement.
When asked about the price discrepancies, Adagold referred the Mail & Guardian to the SANDF, saying that it is “better placed to provide insight on their procurement policies”.
The SANDF gave the M&G a different explanation for each of the price differentials identified. For a tender to Burundi and Sudan, the SANDF explained that the successful bidder met the required specifications, which included not only price, but seating and load capacity.
The department said that Adagold was the only company to submit an execution plan for another flight to those countries, which is why it won the tender.
Regarding the tender differential for the DRC flights, the SANDF said that the one company with a lower tender price “was found to have subcontracted an unapproved supplier”.
The supplier in question, which asked to remain anonymous owing to its interest in future SANDF contracts, said that this argument “does not hold water”. It claimed that it had flown for the SANDF in the past and had been approved for that purpose.
The company also sent the M&G the document for the tender, which the defence force said required an execution plan. The tender document does not call for an execution plan, but details the flight schedule that tender applicants would have to follow.