Tshwane gave R700-million network tender to company that can’t do the job — Altron

Altron has filed court papers asking that a portion of a R700-million computer and telecommunications network contract for the Tshwane metro be declared unlawful.

Sunday Times reports that Altron TMT alleges in its court papers that the winning bidder, Brilliant Telecommunications, could not do the work and shouldn’t have been awarded the tender.

The fight revolves around ICT services that Altron had provided to South Africa’s capital city exclusively for 18 years.

Tshwane split the contract in November. It awarded Altron the bid to supply equipment and hardware, while Brilliantel won the tender to provide software support and maintenance.

Regarding the latter tender being awarded unlawfully, Altron contends that Brilliantel did not have the accreditation from original equipment manufacturers for its bid to be acceptable.

Altron’s founding affidavit states that Brilliantel does not have “the necessary accreditation, appropriately qualified human resources, capabilities or skills to perform the work”.

It explained that Tshwane had invested significantly in Alcatel-Lucent and Huawei equipment and argued that Brilliantel did not have accreditation from either manufacturer to maintain and support their products.

To support its argument, Altron revealed that Brilliantel approached it to subcontract on the project in April.

When Altron refused, Brilliantel subcontracted CBX Tech, an established player with the necessary accreditation from Alcatel-Lucent.

“CBX Tech… is an Alcatel-Lucent partner with known skills in Alcatel-Lucent voice technology,” Altron stated.

It said it could only infer from this that Brilliantel used CBX Tech’s accreditation to overcome the shortcomings in its tender and procure equipment from Alcatel-Lucent.

Brilliantel chief executive Maanda Phalandwa said in his answering affidavit that Altron’s legal action is that of a sore loser hoping to frustrate the provision of services to Tshwane by anyone other than itself.

Phalandwa said there had been no complaints about their work, and he denied the allegation that they don’t have the skills or means to do the job.

However, according to the report, he did not respond to the allegation that they did not have the necessary letters of accreditation.

Phalandwa said Brilliantel submitted a superior bid and that Altron lost on pricing.

He said Altron bid an “exorbitant amount” of over R736 million while they came in at “about” R585 million — a saving of over R150 million.

Altron vs Tshwane

This is not the first time Altron and Tshwane have been embroiled in contract disputes.

In 2019, the Pretoria High Court set aside a contract awarded to Thobela Telecoms for the City of Tshwane’s municipal broadband network project.

Thobela Telecoms is a special-purpose vehicle in which Altron subsidiary Altron Nexus is a minority shareholder.

Tshwane alleged that the tender award was unlawful because internal processes were not followed correctly.

The case went all the way to South Africa’s apex court, which ruled in favour of Altron.

In an order handed down on 19 May 2021, the Constitutional Court affirmed a Supreme Court of Appeal ruling that the contract awarded to Thobela was valid and binding.

It dismissed Tshwane’s application for leave to appeal with costs and refused its application for condonation.

Altron’s troubles don’t end at Tshwane’s municipal boundaries.

In a trading statement published in April, Altron announced that the extension of the Gauteng Broadband Network contract for phase two ended on 8 March 2023.

“The rollout of the project experienced delays outside of Altron’s control, resulting in fewer sites being deployed than initially scoped for in the original tender awarded,” it told shareholders.

“An assessment was performed over the inventory pertaining to this project, resulting in an impairment of R31 million in Nexus.”

MyBroadband contacted Altron and Brilliantel for comment. Neither company responded by the time of publication.


Now read: Altron expects revenue jump — and a big earnings drop

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Tshwane gave R700-million network tender to company that can’t do the job — Altron