Why did R70bn Chinese contracts bypass tender laws, asks DA

Johannesburg - Finance minister Malusi Gigaba had to explain why Chinese parastatals were awarded R70bn worth of contracts without a public tender, the DA’s deputy spokesman on finance‚ Alf Lees said on Sunday.

City Press reported on Sunday that two mega-contracts between government and a Chinese parastatal are set to go ahead, despite neither qualifying for deviation from procurement laws. The department of water and sanitation and rail agency Passanger Rail Agency of South Africa seem set to hand two contracts, worth more than R70bn, to a Chinese parastatal with neither a public tender nor permission from Treasury to bypass tender laws, the paper said. 

READ: China to score in R70bn SA projects

City Press obtained confidential documents that the two state entities were in funding negotiations with the Export-Import Bank of China (Exim Bank). But the documents also appear to show that Exim will only provide the finance on condition that the construction on both projects is done by another Chinese parastatal, the China Communications Construction Company.

The talks centre on the construction of the Moloto Rail Development Corridor, estimated to cost R57bn, and the Mzimvubu Water Project, estimated to cost taxpayers more than R16bn.

Competitive tender processes flouted?

Lees said the massive deal seems to be flouting all competitive tender processes.

He said Gigaba, had to give assurances to both Parliament and the South African public that these two mega-contracts would not go ahead without procurement laws being adhered to.

"Gigaba must urgently account for Treasury’s alleged planned deviation in the competitive tendering process," Lees said. 

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