Ekurhuleni toilet tender 2.0: Same old s**t?
A sought-after contract. A rushed tender. What could go wrong?
Residents of Langaville Extension 8 squatter camp, situated outside Brakpan east of Johannesburg, just wanted four flushable toilets per street, to “restore the dignity of the black person”.
Like others in informal settlements on the East Rand, they have been critical of the provision of mobile toilets by the Ekurhuleni municipality in terms of a controversial 2016 tender.
In March last year, aware that the three-year contract would soon end, residents wrote to the municipality registering their dissatisfaction about the 2016 contract, which they alleged brought health problems and compromised their safety.
The residents pleaded for flushable brick toilets.
But their pleas fell on deaf ears and another billion-rand tender for mobile toilets was awarded in July last year, under similar circumstances to the 2016 contract.
Community leader Makhosini Nhlapo told amaBhungane he believed the mobile toilet contracts were retained because of “greed” and a lack of political will.
The residents of Langaville refer to the mobile chemical toilets as a “plastic bucket system”, noting that the only difference between these toilets and the old bucket system is the use of chemicals to clean them.
This prompted residents to submit a memorandum to the Ekurhuleni municipality in December 2018, in which they requested improved sanitation.
“We are deeply and humbly requesting your help PLEASE! Can we have flushing toilets in our sections, at least four per street? We hope that our request will be successful so we can be healthy and happy like everyone else,” read the letter.
Nhlapo claims that their grievances are yet to be addressed.
Residents also registered their concerns with ANC secretary-general Ace Magashule. In a letter dated 27 February 2019 and sent to Luthuli House, they appealed to him for assistance.
In the memo, the residents stated: “There is no sanitation, no clarity or way forward… We are using the bucket system, sharing a tap of water in the streets.”
The residents ended by stating: “Sithuma wena (We are sending you)” in response to President Cyril Ramaphosa’s popular slogan, “Thuma Mina” (send me).
But according to Nhlapo, Magashule’s office notified them that their letter had simply been forwarded to the Ekurhuleni municipality.
Now the coronavirus is underlining the risks of the sanitation backlog (see Covid-19 exposes sanitation failures).
According to the municipality’s website, 229 companies submitted bids for the three-year (2019 to 2021) tender.
A senior municipal official previously told amaBhungane that a contract to supply mobile chemical toilets “is one of the most sought-after contracts in the city”.
He explained: “The contract does not require much; just provide chemical toilets and service them. Even if you don’t own a single toilet, you can hire them and charge whatever you want.”
When the 2016 tender came to an end in June last year, there was hope that Ekurhuleni would do things differently, starting with the tender process.
But it appears the same formula was used because 11 of the 15 companies involved in the previous project were re-awarded the contract – despite some community complaints about service levels.
The 11 were: Ntships Construction, Theuwedi Trading and Projects, MLO Investments, Mmazwi Civils and Construction, Leloba Bright Trading, TCM Developments, Accolade Engineers, Moreki Distributors, Selby Construction, Sungu Sungu Projects and Red Ants.
The four new companies chosen were: Master Chemical Southern Africa, Comfort Loo JV with Maleboti Construction, NL Moleya Transport and Damaris Holdings.
The tender process also appeared to have been rushed.
Critics have accused the municipality of tailoring the bid specifications for existing suppliers. “Otherwise how do you justify [the fact that] out of 229 companies that submitted bids, only 15 qualified, and it happens to be [mostly] companies in the last contract?” said one unsuccessful bidder, who asked not to be named.
According to several sources, including senior municipal officials and losing bidders, the main red flag centres on the fact that it appears that not only did the municipality not conduct proper research and planning, but it also rushed the process.
The sources all asked not to be named.
“This scenario is fertile ground for corruption to happen,” said one.
Municipal spokesperson Themba Gadebe said due process was followed. In a statement released in November last year, Gadebe said that all service providers were appointed following the supply chain management (SCM) processes, which were “highly regulated and transparent”.
“The City runs a transparent SCM process and the Bid Adjudication Committee is open to the public. As per the SCM processes, specifications were formulated before the tender was advertised. An evaluation was then undertaken before the adjudication process,which is open to the public,” Gadebe said.
The municipality failed to answer specific questions posed by amaBhungane.
However, according to several sources, few manufacturers produce a toilet that matches the specifications in the tender document.
AmaBhungane has seen several emails from contractors to the municipality raising concerns that no such toilet with all the requirements listed in the document exists in the country.
“Research that went into this tender is cause for concern,” said one bidder.
A week after the emails from contractors, an addendum was published, changing the specifications and extending the deadline for submitting bids.
Another cause for concern was that the municipality insisted on having an inspection where bidders were required to have 500 toilets “readily available for inspection”.
“Having 500 toilets for inspection is completely bizarre and did not make any financial sense because even the biggest companies like Sanitech and Bidvest don’t keep that amount in stock – and this meant bidders had to buy for a contract they were not guaranteed to get,” said another source, who described himself as a disgruntled bidder.
This requirement gave existing service providers an advantage.
“We suggested that we [as an alternative] give a financial guarantee to cover the purchase, but Ekurhuleni ignored all this. Why? Who did it favour?” the same bidder asked.
Critics also pointed out that the inspection phase was crucial because it determined who stayed and who did not. “This phase was chaotic, to say the least,” said one.
Another concern was the requirement for companies to have more than R3-million in annual turnover to score maximum points, a factor which also benefited incumbents.
According to the tender document, companies which had less than R2-million in turnover would be disqualified.
They were also required to own at least one vacuum truck with a minimum waste-load carrying capacity of 2,000 litres.
Meanwhile, according to emails amaBhungane has seen, winning bidders were notified on Friday, 28 June 2019 and the new tender was to start on 1 July.
“Hundreds of toilets would have to be rolled out to communities by companies starting a new process that is labour-intensive. Also, appointed companies were supposed to be notified a month before to prepare and give the previous contractors a chance to remove their toilets,” said a municipal official who asked not to be named.
Although the municipality is keeping mum on the costs of the current contract, it is believed the overall amount is worth hundreds of millions. According to the bidding submission list, companies submitted R400-million to R800-million as their bidding price for all 37,500 toilets.
It is not exactly clear what this includes, but this works out to between about R300 and R600 per toilet per month over three years.
A municipal official who did not want to be identified said that the amounts submitted are adjusted based on the number of toilets allocated and services provided per week.
In the previous tender, the municipality spent R1.9-billion over three years on the chemical toilets, including for their supply and cleaning.
Meanwhile, an invoice for the new contract, seen by amaBhungane, notes that the rate paid for the supply of non-flushing toilets per month is about R300 (excluding VAT).
According to the tender, the rate for the cleaning of chemical toilets is R65 (excluding VAT) per toilet per service – plus a mark-up that varies for each bidder. This is paid on top of the rate for supplying the toilet.
Service providers are required to clean the toilets at least once every seven days.
According to the municipal official, there was no set amount of how much companies could charge as a mark-up. “This is where contractors make money,” said the official.
Complaints to us by an unsuccessful bidder, and amaBhungane’s own observations, have raised preliminary questions about some of the contracted companies.
Red Ant Security Relocation and Eviction Services (aka the Red Ants) is better known for its controversial eviction of people illegally occupying land, with such evictions often conducted on behalf of municipalities.
But the company also offers services in the agricultural sector, as well as in construction, security and sanitation – and is reportedly the sole security provider to 11 municipalities.
The company also appears to be politically well connected.
At the 2017 launch of their “vendor and skills development project”, the Red Ants were able to boast an address by the then-minister of trade and industry, Rob Davies.
According to the Red Ants website, Davies praised the “wonderful programme” which provided small vendors with training and stock from the Red Farms AgriPark.
“His words were supported by [the then] deputy minister of rural development and land reform, Hon Candith Mashego-Dlamini, Gauteng provincial economic development MEC Mr Lebogang Maile and Gauteng provincial social development MEC Ms Nandi Mayathula-Khoza,” the website noted.
The Red Ants allegedly enjoyed the lion’s share of the 2016 toilet contract, and the disgruntled 2019 bidder told amaBhungane that the company had used its market dominance to influence suppliers to withhold stock from others.
“This causes a shortage of available toilets in the market, causing other companies to fail to meet their delivery deadlines… When companies fail to deliver, the order is then taken away from these companies and given to the Red Ants to deliver,” claimed the bidder.
He alleged the Red Ants also outsourced a large slice of their contract to another company that controls the import of two of the three big portable toilet brands.
Red Ants chief operating officer Fuzile Balintulo refused to comment on the allegations and referred amaBhungane to the municipality.
Gadebe did not respond to amaBhungane’s specific queries about the Red Ants.
Sungu Sungu Projects is another company with a large slice of the chemical toilet contract.
The company’s chief executive officer is Thabang Khomo, who is alleged to be politically connected, but is an enigmatic figure.
He previously came to public attention in relation to permits granted for shale gas exploration in KwaZulu-Natal in 2013. The fracking project was later abandoned.
The Sungu Sungu group was also the empowerment partner for the Indian company Jindal Steel & Power to establish an iron ore mine outside Melmoth – in the face of strong community resistance.
Another company in which Khomo has an interest, Ricocure, has a 60% interest in two oil exploration blocks (3B/4B) off the west coast of South Africa.
During the tender process, Khomo is alleged to have flown to Belgium to negotiate to purchase such a large quantity of mobile chemical toilets as to effectively choke supply in South Africa.
However, Khomo dismissed allegations that he was politically connected and described himself as a businessman who has 20 years’ experience in the sanitation sector.
He said the shortage of mobile chemical toilets had prompted him to look at other suppliers internationally, adding that he preferred to buy additional stock because the theft rate of the toilets was high and insurance was expensive.
According to Khomo, the tender specified that a toilet had to be replaced within 24 hours after it had been reported stolen or damaged.
“I have complied with the tender requirements, I pay my workers above the minimum wage, I registered them for the unemployment [insurance] fund and took them for the hepatitis B vaccine,” said Khomo.
AmaBhungane has also confirmed that Sungu Sungu’s workers have been supplied with masks and hand sanitisers.
Selby Construction was reappointed under the new contract, despite complaints of poor performance from some Winnie Mandela informal settlement community members in Tembisa, on Gauteng’s East Rand.
The company is owned by Selby Manthata, who was once close to EFF leader Julius Malema and to former Limpopo premier Cassel Mathale, who is now the deputy police minister.
Manthata was charged with corruption related to the investigation of On Point Engineering, the firm in which Malema’s trust had a stake – but the case was temporarily withdrawn after one of his co-accused fell ill in 2015.
He did not respond to amaBhungane’s emailed query.
Accolades Engineering, another company re-awarded a contract, is owned by Joseph Kunene, a Zimbabwean national and the alleged boyfriend of Nozuko Vundla, who works as Masina’s assistant and chief protocol officer.
Kunene denied having a relationship with Vundla but said: “It is not a sin to know someone. These allegations are lies; they will not hold anywhere.”
He then referred amaBhungane to his lawyer, a Mr Leisher, who refused to comment because of the lockdown.
Vundla, on the other hand, said that as an employee of the municipality, she was not obliged to declare her relationship with Kunene.
She then contradicted herself by quoting the City of Ekurhuleni Municipal Integrity Framework, Part C: Local Government Code of Conduct for Municipal. It states:
“A staff member of a municipality who, or whose spouse, partner, business associate or close family member acquired or stands to acquire any direct benefit from a contract concluded with the municipality, must disclose in writing full particulars of the benefit to the council.” DM
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