Evaluation criteria used by Prasa to award the contract for 88 dual diesel-electric locomotives to Swifambo Rail Leasing, which procured the rolling stock from Vossloh Espana, were not consistent with the criteria laid out in Prasa's request for proposal.
The Auditor-General's statement in Prasa's 2013/14 annual report said the winning bidder should had been disqualified because it had failed to supply the letters of good standing with the relevant tax authority in its country of origin, as required.
The winning bidder also failed to submit tender documents signed by both the winning bidder and the sub-contractor as required by the request for proposal.
In addition, the Auditor-General found that the technical capabilities of the bidder were based on those of the sub-contractor. There was insufficient evidence that a sub-contracting relationship existed between the bidder and sub-contractor at the time the bid was evaluated.
Last year, opposition party the Democratic Alliance requested the Auditor-General investigate the deal on the grounds that the locomotives were more expensive than those procured by Transnet.
Prasa's Chief Executive Lucky Montana said that the rail agency accepted the findings. The Auditor-General had picked up weaknesses in what was an open and competitive tender process.
"Naturally, this is a process with its own inherent tensions, but in no way does it suggest this is a dodgy contract," Montana said.
He said six bids were received for the tender and came from Swifambo Rail Leasing, Harvdap, General Electric SA Technology, RRL Grindrod, Thelo Rolling Stock Leasing and the CRM Consortium. These bids were checked for completeness, with only the CRM Consortium's bid found to be incomplete.
Montana said certain shortcomings of a contractual nature were being looked into with Swifambo and Vossloh for improvements. Already, seven of the locomotives had been built and would arrive in SA next month, with the next 20 due to arrive in March next year.
According to the Auditor-General, a performance bond of R307m was paid in Prasa's favour only four months after the contract for the locomotives had been signed. This was after Prasa had paid a deposit of R460m to the winning bidder.
It says the payment was contrary to Prasa's procurement policy, which stated that a performance security (bond) must be provided prior to concluding the contract with the agency (Prasa).
Source: Business Day via I-Net Bridge
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