4 December 2006
The article in Sunday Times 3 December 2006 titled "Bidder pushed up
Gautrain's cost" and the Gautrain Project's response, "Sunday Times, 1
December" refers.
Allegations by the Sunday Times that the Bombela Consortium was responsible
for pushing up the cost of Gautrain are totally incorrect, and a gross
distortion of a highly complex public-private partnership process which has
taken more than three years to conclude.
The Sunday Times has acknowledged to the Gautrain Project Office that it has
access to confidential Bombela Steering Committee minutes. From reading these
documents, the newspaper has assumed that only Bombela was responsible for
putting pressure on the province to increase the estimation of the Public
Sector Comparator (PSC).
It is the responsibility of the province (Gautrain Project Team) to
calculate the PSC. After receiving the bids from the two pre-qualified bidders
on 30 September 2003, it became apparent that both bids (Gauliwe and Bombela)
were too high and that the PSC of the Project was too low.
During November 2003 the Gautrain Political Committee was approached by the
Gautrain Project Team to approve a process of constructive engagement with the
two bidders, in order for the Project Team to adjust its PSC and to give the
bidders the opportunity to submit a more affordable option in terms of a Best
and Final Offer (BAFO). This process was discussed in detail with National
Treasury's Public Private Partnership (PPP) Unit.
This was approved and during 2004 a whole range of discussions, workshops
and meetings were held between the project team and the two bidding consortia.
None of these meetings took place without both bidders knowing about it. It
also included the province approaching leading consultants in Europe to assist
with the calculation of the PSC. It was obviously in the interest of both
bidders to produce as much evidence to and pressure on the province as possible
to determine a more representative PSC.
What the Sunday Times fails to understand is that the competition for the
tender was not between the bidding consortia and the province but between the
two pre-qualified consortia themselves to produce a bid which amongst
others:
* gave the best technical solution in terms of infrastructure and rolling
stock
* had the soundest financial structure including the quantum and conditions
being made available by the lenders to the specific consortium
* met or bettered the requirements for socio economic development
* gave the lowest operating cost during the 15 year concession period
* exposed the province to the lowest possible yearly contingent liability
* the mark-up of the Concession Agreement presented the province with the most
favourable risk profile
* the lowest overall cost.
If the Sunday Times had also had access to the minutes of the Gautrain
Political Committee, the Gautrain Project Team and the Gauliwe Consortium's
meetings, it would not have made its one-sided, ill-informed conclusions, and
would not have misrepresented the bidding process so inaccurately.
It is important to note that this shortcoming was pointed out to the Sunday
Times in advance of publication, and the newspaper was provided with
comprehensive evidence of the entire bidding process, including the nature of
discussions with both pre-qualifying bidders, but that this was conveniently
ignored. We can only assume that this was done because the evidence provided
did not fit with the theory that had already been developed by the
newspaper.
It is also important to note that the Bombela Steering Committee minutes in
question form part of legal documentation from a High Court case (Case
2746/02). After the unsuccessful application by Loliwe, Judge IW Schwartzman
further ruled that "The Court file is to be put in the Registrar's Office and
access there to shall only be permitted by order of a Judge in Chambers."
The Gautrain Project Team does not have access to these minutes and can
therefore not comment on details thereof.
The Sunday Times allegations that the Gautrain Project Team only had
interactions with Bombela is preposterous. As explained numerous times to the
Sunday Times, the Gauteng Provincial Government (GPG) and the Gautrain Project
had constructive engagement with both bidders. Such engagements included, for
example, meetings in the four silos technical, financial, legal and socio
economic development.
The suggestion that deadlines were extended to favour Bombela is equally
preposterous. As can be seen from the attached documentation, it was clearly
explained to the Sunday Times that deadlines were extended on other occasions
at the request of their competitor, the Gauliwe consortium.
The prescribed process and adherence to the Public Finance Management Act in
terms of applying for various Treasury Authorisations were followed and the
necessary authorisation awarded. If the Sunday Times has any information to
prove that the tender authorisations given or requested were procedurally or
otherwise incorrect, they should provide such information to National Treasury
or any other competent authority that the Gautrain Project is accountable
to.
Enquiries:
Barbara Jensen
Tel: (011) 880 9936
Cell: 083 600 4862
Issued by: Gauteng Provincial Government
4 December 2006
