Sipho Jack|Published
Umgeni-Uthukela Water (UUW) issued a notice of intention this week to restrict a company, operating in South Africa and known as China State Construction Engineering Corporation (SA) Pty Ltd, from conducting business with the state.
The state owned entity cited allegations of “fraudulent misrepresentations” associated with the company’s R1.7 billion Umkhomazi Bulk Water Supply tender submission as the basis for their actions.
The allegations have sparked concerns over procurement integrity and transparency at not just the waterboard but also at the South African National Roads Agency Limited (SANRAL) where two executives from the same company have been suspended.
The UUW controversy emerged after it had initiated a tender in August 2023 for the construction of phase 2 of the Lower Umkhomazi water works project.
As part of the bidding process, participants were required to provide comprehensive documentation regarding the company and key personnel involved.
However, investigations revealed that the documentation submitted by the China State Construction Engineering Corporation, in conjunction with its joint venture (JV) partner Chinese Base Major Construction (Pty) Ltd, contained “material misrepresentations.”
According to the report released by the UUW, serious discrepancies were detected in the employment history and credentials of key personnel at the company.
In one instance it found that an employee claimed to have worked for Base Major Construction from 2003 to 2019, despite the company’s incorporation in South Africa only occurred in January 2007.
This contradiction, according to UUW‘s report, suggested the deliberate fabrications were meant to bolster their bid.
“The representation in his CV that he was employed by Base Major Construction (Pty) Ltd prior to its incorporation on January 9, 2007, is a material misrepresentation,” the report asserted, indicating a potential breach of the supply chain management system.
Also, the same employee’s LinkedIn profile contradicted information on his CV, which indicated a history of employment with different organisations, which raised further doubts over the legitimacy of the submitted documentation.
After a thorough investigation, the SOE concluded that both the China State Construction Engineering Corporation and Base Major Construction had engaged in fraudulent activity, leading to the notice of intention to restrict their operations with the state.
UUW maintained that the said restriction was based on accusations of willful or negligent abuse of procurement processes.
In response, the China State Construction Engineering Corporation denied the charges and announced its intention to take the matter to a judicial review process, as it disputed not only the allegations but also expressed concerns regarding the timing of the SOE’s notice in relation to ongoing legal proceedings.
“The timing of the purported restriction notice is telling,” the company stated, implying that the actions of the SOE were possibly politically motivated or aimed at swaying the judicial process in their favour.
The company questioned UUW’s authority to impose such restrictions, and asserted that any decisions regarding business qualifications lay with the National Treasury, not the water utility.
“The water board has no legal authority to enact such a restriction,” emphasised the company in a statement, which asserted its unwillingness to be coerced into withdrawing its legal challenge.
UUW‘s spokesperson, Siyabonga Maphumulo, confirmed the issuance of the notice but refrained from delving into specifics of the matter due to ongoing court proceedings.
“While we are unwilling to comment in great detail on the matter as it is currently before the courts, we can confirm that a letter was indeed issued.
“There are also no project related costs to be recouped by UUW from the company as it had not engaged in any work,” Maphumulo said
He clarified, however, that there were no financial implications for the SOE since the joint venture had yet to engage in any project-related work.
Last year, the SANRAL also suspended the company’s R1.57 billion Masekwaspoort tender due to alleged irregularities discovered during the bid adjudication process.
SANRAL’s spokesperson, Vusi Mona, confirmed that significant concerns over documentation validity led to further legal examinations of the tender award.
“The tender was suspended because the Sanral uncovered material irregularities in the adjudication process. SANRAL subsequently decided to launch a High Court application to review and set aside the tender award.
“There have been reports that Chinese Base Major Construction did not have the proper documentation at the time the Masekwaspoort tender was awarded.
“It has been reported that their registration with the Construction Industry Development Board (CIDB) was suspended. Base Major Construction’s status with CIDB at that time was active and, after confirming this to be the case, as part of the procurement process, which is a legal requirement at the evaluation stage, the Sanral proceeded with the evaluation,” explained Mona.
The China State Construction Engineering Corporation also ventured into business with the Chinese Base Major Construction on the Sanral job.
He further stated that the agency will in due course, take all the necessary steps after the outcome of its investigation into the Masekwaspoort tender award and the irregularities that would have been uncovered.
“The steps that the Sanral will take will become public once the discovery of irregularities are finalised in the courts.
“The process before the courts is now at an advanced stage, and questions that pertain to this matter will be responded to in due course once the process is finalised”.
According to a media report the JV partners “failed to meet requirements.
The report stated that an audit into the award of the tender found that the China State Construction Engineering Corporation did not comply with or meet the requirements of the tender to have completed at least one project valued at a minimum of R400 million.
It is further claimed that some of the references submitted by the JV related to the experience of the JV partners were not valid and responsive to the evaluation requirements of the tender.
Umgeni Water has given all implicated persons, named in the report, and linked to China State Construction Engineering Corporation fourteen days to plead their case as to why they should not be restricted from doing business with the state for a period of two years.
DAILY NEWS
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