Telkom hit by another tender row

A R1.5-billion outsourcing tender for the management of telex services is being investigated at Telkom — the second such scandal at the parastatal in months.

It follows an urgent court application by Maredi Telecom and Broadcasting in January to stop Telkom awarding a R1.25-billion microwave tender to Ericsson South Africa and Telsaf Data.

Maredi alleged that Telkom violated the Promotion of Administrative Justice Act, which deals with the awarding of contracts by state-owned entities.

Maredi said Telkom acted in bad faith, flouted procurement regulations and circumvented tender procedures. Judgment in the matter has been reserved.

Now, two months later, similar claims are being made by another BEE company, Phutuma Networks.

Phutuma said the tender was rigged and claimed the outsourced task is already being carried out by rival bidder Network Telex — despite the tender not being awarded yet.

Phutuma chairman Joe Xaba said: “Our investigations reveal… the other supplier (Network) is currently doing 70% to 80% of the services requested in the formal Telkom bid still under adjudication. This makes a mockery of fair bid governance.”

The scandal could not have come at a worse time.

In an unusually busy week for Telkom, the company announced on Wednesday that group executive for network infrastructure provisioning, Marius Mostert, had been suspended.

No reasons were given, but it has been established that Mostert was a key figure in both the disputed tender processes, among others.

Regarding the Maredi matter, Mostert and Telkom chief executive officer Reuben September are alleged to have had close links to Ericsson, which was awarded the tender despite not meeting technical requirements.

In relation to the second tender, Mostert was head of technical services at a time when “unethical behaviour on the part of Telkom officials” prompted Phutuma to lodge its complaint.

However, Telkom spokesman Pynee Chetty said on Friday that Mostert’s suspension was “most definitely not” linked to the latest controversy.

Commenting on the telex tender, he said: “It is not yet awarded and will not be awarded until we have fully investigated various complaints.”

Chetty said the tender process was initially cancelled in November 2005 for “technical reasons” and “investigations” following initial complaints. The tender was re-advertised in November 2007.

He said as a result of a complaint by Phutuma on January 23 this year “valuations and decisions with regard to the tender were immediately suspended”.

He said the cost was “nowhere near” R1.5- billion. “Our indicated value to bidders is an estimated R10-million per annum, which is not guaranteed.”

The controversy comes at a bad time for September, who stands accused of signing off the controversial tenders and faces a leadership battle.

Allegations against him first surfaced after the board sacked chief operating officer Motlatsi Nzeku early in February.

Telkom said Nzeku was “divisive and counterproductive”, and that his actions had been defamatory to the company.

He also opposed September’s restructuring plans, which are scheduled to be implemented on Wednesday.

Nzeku compiled an explosive dossier alleging tender irregularities and casting doubt on September’s fitness to carry out his fiduciary duties.

In the document, Nzeku also blew the lid on the Maredi matter.

Asked to comment this week, the sacked executive said: “This vindicates what I’ve been saying, which is there’s been widespread violations of tender procedures.”

Xaba, meanwhile, said the telex outsourcing contract was worth at least R10-million a month with the contract running up until 2020 — meaning a R1.44-billion windfall for the lucky bidder.

“We have been working with Telkom since 2003 on this project.

“It was re-advertised in November 2007, with no credible explanation given, and we discovered that the second bidder was a company we had subcontracted in our initial bid document and whom, we discovered, had been approached by Telkom.”

He said lawyers had been instructed to file a civil claim. Phutuma has also put together a dossier that includes crucial correspondence between it and Telkom.

Said Xaba: “The evidence indicates a flawed procurement process… as well as the appointment of a… British company that is not governed by Telkom’s BEE policy nor stringent tender processes.”

Chetty denied Telkom had a contract with any company but added that “it appears that the contractor might have entered into arrangements directly with the Post Office”.

Telkom, he said, had a contract with the Post Office for its telex service until 2020 and was also “entitled to outsource”.

He said the Maredi matter was sub judice but a KPMG probe, instigated by September, was progressing, albeit within certain constraints.

Communication Workers Union general secretary Gallant Roberts said “anyone involved in corruption at Telkom must be brought to book and feel the full might of the law”.

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