A huff and a puff over tender bid by Moyagabo Maake , 29 September 2013, 09:05 The Passenger Rail Agency of South Africa is fighting tooth and nail to avoid having a lucrative tender reviewed after a losing bidder pointed to various irregularities in the way it was awarded THE PASSENGER Rail Agency of South Africa (Prasa) is fighting tooth and nail to avoid having a lucrative tender reviewed after a losing bidder pointed to various irregularities in the way it was awarded. An entity central to the tender has now attracted the attention of the police’s anticorruption task team. Three years ago, Prasa gave the Umjanji consortium — made up of outdoor media company Provantage, a small company called Surprise SK Investments, and the Consolidated Future Growth and Investment Foundation Trust — the rights to lease and advertise on all sites owned by the transport parastatal. The amounts involved ran into the millions: as part of the contract between Prasa and Umjanji (seen by Business Times), Umjanji had to provide a “demand guarantee” of R2m and a commitment to spend just over R34m in capital expenditure. In return, the winning bidder got to enjoy revenues generated from advertising to millions of eyeballs in transit on Prasa’s public transport sites across the country. Primedia Outdoor, one of the losing bidders, has hauled Prasa to court over the decision, alleging that the awarding of the tender was irregular, and giving it all to a single entity — when sites were parcelled out in the past — thus breaching the Competition Act. The Competition Commission is investigating this claim. Smaller players in the outdoor media industry say the tender has placed their survival under threat. Prasa is contesting the application, despite admissions in its lawyers’ responding affidavit that there were “six very minor indications of administrative errors”. “No fraud or anything sinister is alleged or can be alleged,” they said. But an affidavit penned by Provantage MD Jacques du Preez, applying to be a party to the Primedia/Prasa dispute, has raised questions about Prasa’s motives for blocking the review, as Du Preez exposed the consortium’s political connections. Besides one Provantage director being prominent businessman Sandile Zungu — widely considered a confidante of President Jacob Zuma — the Consolidated trust had Donald Magaoga as its executive trustee, who signed the contract with Prasa on behalf of the trust. Mr Magaoga’s profile on online professional social media network LinkedIn shows he is the chief financial officer of the KG group of companies, which includes KGP Media trading as KG Media. KG Media is owned by ANC national executive committee member and former treasurer of its youth league, Pule Mabe. Mr Mabe said last week Mr Magaoga had “long left our employ”. He did not know if Mr Magaoga or the trust were currently “part of any tender”. But a paper trail ties Mr Mabe closer to the consortium: the deed of the trust filed with the master of the high court suggests Mr Mabe played a role in setting up the trust. Included in the file is an ID copy from Mr Magaoga’s co-trustee, Janet Daniel, faxed to Mr Mabe. The trust deed placed the location of its assets at Luthuli House, the ANC’s headquarters in Johannesburg. Included in the trust deed file was a Special Investigating Unit (SIU) request for the trust’s documentation, sent to the Master two years ago. The SIU, an independent body, investigates fraud and corruption within state institutions and involving public funds. According to the investigating officer on the case, the SIU has since handed over the case to the anticorruption task team unit of the Hawks, the police’s elite crime-fighting body. Hawks spokesman Captain Paul Ramaloko did not respond to questions by Friday afternoon. Approached for comment last week, KG Media managing director Hleki Mabe, Pule’s wife, denied any involvement with the Prasa tender. Confronted with the evidence on Friday, Mr Mabe said the tender was before the courts and he would not like to “entertain any speculation at this stage”. “Once more, and as stated previously, I wanted to reiterate that I am not involved with any party,” he said. Co-trustee Daniel said she had faxed her ID to Mr Mabe to pass on to Mr Magaoga, as both worked together at the time. “Mr Magaoga was advised [a] long time [ago] to change the address after the trust was lodged with the Master’s office,” she said. “When the trust was set up he was working with the treasurer-general of the ANCYL [Mabe] and this, I guess, was just for convenience.” Prasa spokesman Moffet Mofokeng denied it was fighting the review because of the winning bidder’s political connections. “It is actually malicious on the part of those who are making the claim,” he said. “We award companies contracts on the basis of the strength of their bids, not based on who they know or [are] connected to.” • This article was first published in Sunday Times: Business Times
Posted on: Wed, 02 Oct 2013 15:22:11 +0000
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