Red flags over R1.6 billion tender for a 40km road in Limpopo

A contract worth R1.57 billion to improve a 40km stretch of the N1 in Limpopo was suspended by the High Court, prompting an investigation by the South African Roads Agency (SANRAL) into the tender award.

This came to light in a response by Transport Minister Barbara Creecy to DA MP Dr Chris Hunsinger, who requested an update on the agency’s internal investigation.

According to the minister, Hillary Construction instituted proceedings in the High Court in November 2024 to review and set aside the contract to improve Section 29, from Masekwaspoort toward Musina.

In February last year, the tender award was suspended by court order, pending the completion of SANRAL’s investigation.

Creecy explained that the investigation identified material irregularities in the award. Among the recommendations was that SANRAL institute self-review proceedings to review and set aside the tender.

“This recommendation was accepted by the board, and the SANRAL High Court Review was instituted in the High Court,” said the minister.

She also told Hunsinger that the investigation report will not be published for general circulation, as it was prepared by the agency’s attorneys for the purpose of providing legal advice and informing litigation

However, Creecy confirmed that the investigation recommended consequence-management measures, including disciplinary action against employees implicated in the alleged misconduct.

Hillary Construction and SANRAL have both submitted review applications to the High Court, as both seek the setting aside of the existing tender award.

That being said, the two parties are disputing the appropriate remedy. SANRAL is seeking a fresh procurement process, while Hillary Construction seeks a substitution order directing that the tender be awarded to it.

In her response to Hunsinger, Creecy explained that SANRAL cannot provide a definitive commencement date while the review proceedings remain pending.

She added that the timing and form of any fresh process depend on the High Court’s determination of the appropriate remedy.

Billions in contracts already set aside by SANRAL

Last month, it was decided that SANRAL should set aside a R9.5 billion tender for road maintenance after the High Court ruled its system was unlawful and unconstitutional.

SANRAL was forced to revert to an open tender process for routine maintenance after consolidating a list of over 250 contractors into only 20, from a pool of over 400 bidders.

According to the roads agency, it did this to streamline its procurement processes; however, this, alongside a separate panel for Category 2 engineering consultants, was ruled unlawful.

The roads agency’s outgoing CEO, Reginald Demana, acknowledged that the roads agency was not equipped to award a R9.5 billion tender for routine road maintenance to the 20 companies.

“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.

He noted that this was not the first time SANRAL had faced legal challenges related to weaknesses in its procurement processes in recent years.

Other instances include 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 decision would then follow their applications, with the agency’s legal counsel regularly assessing its chances of successfully defending the cases as low.

Historically, this has led SANRAL to concede these matters, rather than engaging in costly litigation that would burden taxpayers.

It also ensured that these matters would be resolved while ensuring that road maintenance work proceeded without interruption.