- A court has ordered that the City of Johannesburg cannot go ahead with a contract for 48 fire and rescue vehicles.
- Some of the other vehicles that were already ordered and paid for, will stay in place.
- However, the directors of the contractor have to pay back salary increases they gave themselves, and give the court a report on what their profits and shareholder payments were.
The Gauteng High Court has stopped a City of Johannesburg contract for 48 fire and rescue vehicles after it found that the contract had been unconstitutionally awarded and that it was irregular.
A deal for some vehicles, which were paid for and delivered, will stay in place, but the directors of the contractor have to pay back salary increases they gave themselves and reveal how much profit they made.
The judge who gave the order also wants the National Director of Public Prosecutions to investigate whether City of Johannesburg officials lied about aspects of the contract.
On 29 March, Judge Thina Siwendu found that, since the tender was awarded unlawfully to TFM Industries, the parts of it that can be stopped must be stopped.
In a lengthy unpicking of the history of the contract, Siwendu explained that on 5 July 2019, the City of Johannesburg procured 92 fire engines and rescue vehicles, known as the "Red Fleet", from TFM Industries for R582 991 957.22 through a deviation in terms of municipal supply chain management laws.
Following a review application by the original bidders, Marce Projects, Marce Firefighting Technologies and Fire Raiders, the tender process, the decision to award the tender, and the agreement on the tender between the City of Johannesburg and TFM Industries were declared invalid and unconstitutional.
Siwendu noted that all of the companies were competitors who had done business with the City.
The City started the process of buying 29 new fire engines in 2015. That process was terminated in 2015, pending allegations of irregularities against Fire Raiders, which eventually went into business rescue.
Five fire vehicles had already been delivered to the City.
On 18 September 2018, the City invited tenders again in terms of Bid A781.
It eventually recommended a split between two companies - Fleet Africa, a member of the Super Group for the maintenance aspect of the contract, and Tallis Fleet Consortium - to manufacture and supply the emergency vehicles.
Bidvest, a tenderer who submitted its bid with TFM, alleged that there were irregularities. Tallis eventually withdrew from the process even though it had been awarded a tender.
The City claimed there was no qualified bidder after Tallis withdrew and, through the City manager, asked a select group of original equipment manufacturers about their availability of vehicles were "on rubber" and could be delivered immediately.
The City manager granted a deviation from the procurement process on 11 June 2019. On 5 July 2019, TFM was appointed to deliver the vehicles.
There was a lengthy dispute over whether the bid was still open, or whether TFM had been squeezed in via a "self-created emergency" where normal procurement process could be side-stepped.
Questions were also raised over whether the contract had been altered to accommodate price changes, and whether the company could actually deliver as promised.
Additionally, there were also queries over claims over whether it had a bank guarantee so that it did not have to be paid advances to reduce the City's exposure to financial risk.
At first the City defended its actions, saying it needed the fire and emergency vehicles urgently.
But in February 2020, the new mayor, Geoff Makhubo from the ANC, who replaced the DA's Herman Mashaba, did an about-turn and said in a press statement that there were irregularities and a "self-created" emergency.
The City of Johannesburg welcomed the judgment, blaming the lapse on Mashaba's administration.
"We are pleased that the courts have ordered that the fire engines paid for by the City be delivered within 60 days and that the remainder of the order for remaining vehicles was declared legally invalid, cancelled and terminated forthwith," said mayoral spokesperson Mlimandlela Ndamase.
"The judgment now opens way for the city to undertake a legal and competitive process in line with S217 of the Constitution for the procurement of fire and rescue vehicles to meet the current requirements and mitigate the risk currently suffered by residents."
Ndamase said the City would move swiftly to procure fire and rescue vehicles in a legal manner.
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