The South African National Roads Agency (SANRAL) was forced to revert to an open tender process for routine road maintenance after the High Court ruled that its system for a R9.5 billion tender was unlawful and unconstitutional.
SANRAL had previously managed road maintenance through over 250 contractors before consolidating these into a list of just 20 companies from a pool of 401 bidders.
It did this in an attempt to streamline its procurement processes; however, this decision has now been successfully contested in court by two construction firms.
Additionally, a separate panel for Category 2 engineering consultants has also been ruled unlawful due to irregularities in its tender adjudication processes.
The roads agency’s outgoing CEO, Reginald Demana, explained that the company is preparing to issue new open tenders in batches, which it has already started in limited quantities in the Western and Northern Cape.
To ensure continuous road maintenance during the transition, existing contractors will remain on board until at least the end of November, when new open-tender contracts must be finalised.
On the other hand, there are no existing engineering consultancy service providers, meaning that no extensions for these are currently necessary.
Following the High Court’s ruling, SANRAL noted the need to improve its internal preparations when changing its core operating model, as well as the socio-economic impact on service providers excluded from five-year panel appointments.
“The incumbent contractors remain in place until 30 November 2026, and SANRAL must ensure uninterrupted road maintenance during the transition; and all panel appointments have fallen away – no work may be allocated under the set-aside tender,” explained Demana.
“We have prepared the tender packs, and we are running a live proactive internal assurance process.”
He added that the limited number of tenders already issued in the Western Cape and Northern Cape signals the roads agency’s intention to move quickly to get the new process on track.
SANRAL was ill-equipped to award tenders
The outgoing CEO acknowledged that the roads agency was not equipped to award a R9.5 billion tender for routine road maintenance to a panel of 20 companies.
This resulted in the Pretoria High Court’s ruling that the decision was unconstitutional and unlawful, leading to its annulment.
“We were ill-equipped to enter into panels. For now, we will go back to what we have always done: issue tenders individually using an open tender process, as we have done in the past before exploring the panel route,” he explained.
BCB Solutions and Botle Ba Afrika Roads were the construction companies that successfully challenged SANRAL’s decision to reject their bids in court last week.
According to Demana, this was not the first time the roads agency had faced legal challenges related to weaknesses in its procurement processes in recent years.
This includes issues related to the awarding of high-value contracts, the selection of engineering consultancy panels, and the appointment of routine road maintenance contractors.
Demana explained that, in most instances, unsuccessful bidders sought urgent court interdicts to halt the signing of service-level agreements and the start of work.
Reviews of the procurement decisions followed these applications, with legal counsel consistently assessing SANRAL’s chances of successfully defending these cases as low.
This led the company to concede these matters, rather than engaging in costly litigation that would burden taxpayers, while ensuring that road maintenance work could proceed without interruption.
During a media briefing, Demana highlighted the weaknesses in the tender value chain system.
He noted that his colleagues would need to provide explanations for the lapses, the individuals involved, and the actions taken to rectify them.
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