Mbhazima Shilowa, on the Gautrain project
4 December 2006
I am sure by now most of you are aware of allegations by the Sunday Times
that the Bombela Consortium was responsible for pushing up the cost of
Gautrain. I want to assure the house that those allegations are false and are
without substance.
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 Public Sector Comparator 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 Public Sector
Comparator (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 and approved. 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
them. The province also approached leading consultants in Europe to assist with
the calculation of the PSC. It was obviously in the interests of both bidders
to produce as much evidence and to put as much pressure on the province to
convince it to increase their PSC.
What the Sunday Times may have misunderstood 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 among others:
* gave the best technical solution in terms of infrastructure and rolling
stock
* had the soundest financial structure
* met or bettered the requirements for socio-economic development
* gave the lowest operating cost during the 15 year concession period (and
thereafter)
* exposed the province to the lowest possible yearly contingent liability
* presented the province with the most favourable risk profile
* the lowest overall cost.
There have been allegations that the cost and timeframes were adjusted to
meet Bombela's demands. Both consortia made requests in this regard. From time
to time we have said it is in the best interests of transparency to adjust
timeframes and costs to accommodate all the bidding consortia. To say it was
done for Bombela would be wrong.
The National Treasury has also issued a statement confirming it had agreed
to meet with both consortia although only one made it to the meeting.
On behalf of the Gauteng government I want to say that if anyone has any
information that suggests, shows or proves that we violated tender or
procurement procedures, they are free to provide that information to any public
authority of their choice. If that authority were to come to a conclusion that
there should be an investigation, we will provide all the necessary support
because we know that we have done everything to adhere to the letter and spirit
of the law.
Issued by: Gauteng Provincial Government
4 December 2006
Source: SAPA
