Tender trouble: South Africa scraps road project worth over $205 mn after 3 years

The South African National Roads Agency Ltd () has decided to cancel a tender worth R3.7 billion, which was issued over three years ago. The tender was aimed at improving the capacity of National Route 2 (N2) Section 25 from the Edwin Swales interchange to the south of the EB Cloete interchange in KwaZulu-Natal (KZN).

Despite being open for bidding since 2021, the tender was recently scrapped by Sanral. The agency received bids as high as R3.7 billion, but it deemed the prices to be no longer “commercially viable.”

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According to TopAuto, the tender, issued in January 2021, attracted six bids from various parties:

Resilient Rock (Pty) Ltd – R1.94 billion ($106,86 million)
Thule Holdings/Mmakgoge Group Joint Venture – R2.35 billion ($129.46 million)
Grinaker-LTA (Pty) Ltd – R2.64 billion ($145.46 million)
Concor-Vumani Edwin Swales Joint Venture – R2.99 billion ($165.98 million)
Stefanutti-Stocks-Icon Edwin Swales Joint Venture – R3.18 billion ($175 million)
Hlanganani Joint Venture, comprising Raubex, WBHO, Motheo Construction, and Enzon Construction – R3,73 billion ($205.53 million)

Sanral’s general manager of communications and marketing, Vusi Mona, stated that “due to changes in the market, the tendered prices are no longer commercially viable,” leading to the cancellation of the tender last month.

There was a discrepancy with the tender report, as Mona claimed the agency received five bids when six were listed on Sanral’s website. Resilient Rock, one of the bidders, faced legal challenges and was placed in provisional liquidation in May 2023.

Sanral also appointed a second service provider to conduct due diligence investigations, resulting in an extension to the adjudication process. However, the nature of the irregularities leading to the cancellation was not revealed.

Sanral has not confirmed whether the KZN tender will be reissued. This cancellation is not the first of its kind, as Sanral has previously cancelled tenders worth billions of rands. In October 2023, the agency withdrew its Preferential Procurement Policy (PPP), which led to the cancellation of more than 80 tenders worth a combined R11 billion.