Chinese contractor plays BEE card

2011-11-26 17:28

A court has questioned the decision by a Limpopo municipality to award a joint venture (JV) – half-owned by a Chinese national – 100% for BEE, along with a R200-million tender.

The contract, that is yet to provide residents of drought-stricken villages in Limpopo’s Mopani Municipality with water, is being challenged in the North Gauteng High Court by two losing bidders.

At the centre of the dispute is a company linked to a politically connected Limpopo businessman.

Tlong Re Yeng Trading is owned by Constance Malebate, the sister of businessman Selby Manthata.

Manthata is a business partner of Limpopo Premier Cassel Mathale.

In October last year, the municipality awarded a R217-million tender to a joint venture to construct water pipes.

The JV comprises Tlong Re Yeng and Base Major Construction, which belongs to Chinese national Jinpu Lu.

Jinpu only received South African citizenship in 1998, but the joint venture scored full points for claiming to be a previously disadvantaged company.

The water project, which was scheduled for completion by the end of this month, was meant to provide relief to thousands of families in the Greater Giyani region.

The area was declared a disaster area due to chronic water shortage.

Two unsuccessful bidders, Esorfranki and Cycad Pipelines, are now challenging the tender process in court, alleging “collusion” and “corruption” between the JV and the municipality in the “flawed” tender adjudication process.

The two companies claim that their bids, which were respectively R10 million and R40 million cheaper than that of the JV’s, should have been considered for the contract.

The court granted an interdict against the municipality for all work on the project to be halted.

For a second time since February, Esorfranki and Cycad have applied for a review of the tender.

This after Mopani re-awarded the tender to the JV, following a prior review of the contract ordered by the court.

Esorfranki claims the municipality should have disqualified the JV on the basis that it did not have a high enough grading in construction from the Construction Industry Development Board.

Acting for Esorfranki, advocate Werner Luderitz SC told the court this week the Mopani municipality and the contractor violated five previous interdicts by working “day and night” on the pipeline project.

He said: “The joint venture was party to the fraud and the municipality was a willing participant. We will show that they (the JV) were far more than just complicit.”

Mopani Mayor Joshua Matlou told City Press that they would approach the Constitutional Court if the council lost the latest court bid.

Malebate has in turn slammed Esorfranki and Cycad, who she says “belittle” her for “(being) a woman, inexperienced in engineering works”.

She also blamed “the injustices of the past” for not being as experienced in the piping industry as Esorfranki and Cycad.

She said the companies’ criticism of her had an “air of racism”, and rejected claims that the JV had colluded with the municipality to win the tender.

The case, which has cost the council an estimated R5 million in legal fees so far, was postponed to February 6 for further argument.


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