Probe delays R57?mln tender

2014-03-04 00:00

A PROBE by the Competition Commission has apparently delayed the signing of a R57 million medical waste tender contract between KZN’s Health Department and Compass Waste.

The department’s failure to sign the contract means they are paying Compass Waste on a far more costly month-to-month basis as opposed to the costs they would have incurred on a three-year tender.

This comes after The Witness reported last December that Compass Waste was waiting to meet the department to sort out the finer details relating to the tender after the Provincial Treasury’s Bid Appeal Tribunal upheld its appeal.

Compass director Ian du Randt confirmed that a draft service level agreement has been prepared, but has not yet been signed by the department.

“However, we do not think that such agreement is strictly necessary between the parties following the tender process,” he said.

Du Randt said they do not know why the contract has not been signed.

But The Witness understands that the department has delayed signing after one of the losing bidding companies, EcoCyle, notified head of department Sibongile Zungu that it would not pursue legal action after it threatened to do so.

EcoCycle managing director Sifiso Khuzwayo in a letter to Zungu in February said: “We will now pin our hopes on the investigation by the Competition Commission, which is looking into Compass Waste Services anti-competitive behaviour.”

He said they would ask the commission to monitor the contract to check whether their rival would stick to the low bid price and possibly seek price adjustments, among other things.

The commission told The Witness that the complaint has been sent for further investigation and a decision would be made once the probe was completed.

According to the commission, once the probe was completed, a decision would be made to either dismiss the complaint or alternatively fine Compass or refer the matter to the tribunal.

Du Randt said his company strongly disputed the complaint by EcoCycle and have co-operated fully with the commission, providing it with the relevant financial information.

“There is absolutely no basis for the complaint. It was made by one of our direct competitors, which was not successful with the tender.”

He said his company hoped that the commission would agree with them that the complaint was unfounded and be dismissed.

The department initially awarded the tender to three companies for the province’s four regions in June. Compass — who won part of the tender for one region — lodged an appeal with the Bid Appeal Tribunal, which ruled that Compass should provide the medical waste service in all four KZN regions, because its prices were cheaper than those of other companies.

Replying to The Witness’s questions, department spokesperson Sebe Zwane replied in a text message saying: “The matter is with the Competition Commission.”

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