Indian firm not to bid for lucrative SA contract

Monday, 23 September 2002, 07:00 Hrs
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JOHANNESBURG: India's Paharpur Cooling Towers will not bid again for a contract to manage South African forests even though the government has declared the winning bid by another firm invalid.

South African Public Works Minister Jeff Radebe said the government had found enough reason to cancel the contract of Zama Resources Corporation after allegations that tender process rules had been breached.
Although South Africa had the option to award the contract to Paharpur, which came second in the bidding, it decided to initiate a new tender process for the management of 130,000 hectares of state-owned forests in Komatiland.

Paharpur said it was unlikely to file a tender again because of the huge costs involved in the process that could take as long as 18 months.

The company had hoped it would get the contract after Zama was disqualified. Paharpur had entered into a partnership with local empowerment company Sefateng to meet the requirements for the contract that would have benefited previously disadvantaged communities in South Africa.

Paharpur and Sefateng had initiated legal action to declare the tender process unjust and dishonest.

This followed allegations that Zama's former chief executive Mcebisi Mlonzi donated 55,000 rands to Andile Nkhulu, the suspended chief director of the public works ministry.
Both men were dismissed after auditors found that the money had been used for personal reasons.

Somewhat ironically, Radebe said all parties were free to tender in the new bid process, effectively opening the door for Zama and its new management.

But Paharpur business development general manager Vineet Rohatgi said the company was not likely to spend money on the second bid.

"The first round of the process cost us seven million rands. If we participate in the tender process again (at an estimated cost of six million rands), we might miss other opportunities elsewhere, where there may be considerably better chances of success," Rohatgi said.

He was concerned about Paharpur's chances in the second round of bidding. "Either Zama or another genuine empowerment company is going to get the tender in the second round. It seems to us that the only actual measure is that the company must be one that genuinely engages in black economic empowerment.

"In the light of the fact that South Africa is number 113 on the Unctad list of 140 countries regarding the attractiveness of direct foreign investment, we have seriously reviewed our decision to invest in the country."

Paharpur won support from the opposition United Democratic Movement leader Bantu Holomisa, who said that as reserve bidder Paharpur should have been considered, rather than reopening the tender process.

Holomisa believed Paharpur had been "sidelined" because it was not "manned" by African National Congress (ANC) heavyweights.

Zama is said to have support from a number of leading ANC members at various levels because of its strong black economic empowerment component.

Source: IANS
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