Bosasa fleet tender extended

2012-12-09 10:00

Transport department extends multimillion-rand government tender to company linked to a Hawks corruption investigation

The transport department has ­extended a multimillion-rand government fleet management tender to a company linked to a Hawks corruption probe.

Phakisa Fleet Solutions (PFS) is owned by the Bosasa group that is currently under investigation for bribing senior correctional services employees for government ­tenders.

Phakisa formed a joint venture with Avis and its listed holding company, Barloworld, in 2006 to win a fleet management tender, ­estimated to be worth more than R3 billion over five years.

The joint venture was called Phakisaworld and delivered ­vehicles to a range of state entities, including the departments of ­labour, water and forestry, the presidency and the Public Protector.

When the tender expired in ­November last year, the transport department extended it for another two years without putting it out on tender for new bidders.

At the same time, PFS, the ­Bosasa company, sold its shares in Phakisaworld for R23.5 million.

Questions are now being asked about the timing of Bosasa’s exit from the deal and the company’s role in securing the extension of two years.

City Press is in possession of an email sent by Bosasa’s chief of ­operations, Angelo Agrizzi, to Clive Else, the chief executive of Avis Fleet Services, and Bosasa chief ­executive Gavin Watson, about the sale of the shares.

Writing on April 6 last year, Agrizzi said he “received a mandate from the shareholders to dispose of our shares in Phakisaworld, for an amount as per our estimations to the value of R23.5 million”.

He then adds: “This value is ­obviously pursuant to getting a two-year extension on the existing contract.”

Bosasa did not respond to questions about why its sale of shares was linked to the extension and what role it played in securing an extension of the contract.

But the view held by Avis about Bosasa’s role in the project becomes clear through Else’s communication, leaked to City Press.

He wrote to the company: “The exit of PFS may impact at a ­political/lobbying level as our ­partners (Bosasa) have influence at a very high level within government. This influence has never been seen to materially impact on the operation, but its absence will be felt in ways which are at present indeterminable.”

He added that Bosasa’s influence “was observed through the (extension of the tender)”.

Else declined to respond to ­questions about his comments on political influence and whether it was company practice for Avis to source partners with influence when they tender for government work.

He claimed that the information in the possession of City Press was sourced via a “disgruntled former employee” who was dismissed for dishonesty.

“Phakisaworld has complied with all proper channels, codes of conduct and best practice in this matter,” Else said.

Transport department spokesperson Tiyani Rikhotso said the tender was extended owing to a lack of funding to conduct a feasibility study of the project.

“The extension of the contract was on the same terms and conditions of the initial contract,” he said, adding that it was “usage based” and that he couldn’t put a value on the extension.

Asked why the contract was ­extended to Phakisaworld even though one of its partners was ­under investigation for corruption by the Hawks, Rikhotso said that “all due processes were followed in awarding the tender” and that a due diligence investigation was done prior to the awarding of the original tender in 2006.

Rikhotso said the department was unaware of the condition that Bosasa’s shares would only be sold after an extension was secured and that the company used its “influence” to secure an extension.

City Press reported early last year that a probe by the Special Investigating Unit (SIU) found Bosasa built a house for former prisons boss Linda Mti and bribed the ­department’s former finance chief, Patrick Gillingham, with cash, cars, a kitchen and rugby tickets.

The SIU report was referred to the Hawks and the National Prosecuting Authority (NPA).

NPA spokesperson Bulelwa Makeke said that they had a “decent list of witnesses” and that the case was “progressing very well”.

- City Press

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