BIDDERS vying for a lucrative tender to recover billions owed to a municipality were shocked to discover they would allegedly first need to put up billions before securing the contract.
One businessman told Sowetan that during a briefing session - which was allegedly attended by about 55 people on November 20 - Ekurhuleni metropolitan municipality's director of revenue management and enhancement programme, Miyelani Holeni, announced that the successful bidder would be required to put up a R3-billion guarantee. This had to either be in the form of cash or a bank guaranteed cheque.
The astronomical figure, Miyelani allegedly said, was to secure the rights to the lucrative tender. The businessman who brought the extraordinary tender to Sowetan's attention had just suffered the initial shock of finding out that tender documents alone would cost him R75000.
The figure is quoted in three separate newspaper advertisements, copies of which are in Sowetan's possession.
Last Thursday staff at the municipality's finance department offices in Benoni, east of Johannesburg, unwrapped boxes containing proposals submitted by monied entrepreneurs hoping to clinch the tender.
Eight companies submitted proposals, meaning the municipality may have netted about R600000 from tender documents.
Our source was among those who did not submit a proposal. The tender forms part of the municipality's plans to restructure its debtors book - worth R8.6-billion in October, when the plans were announced.
Yesterday, during an interview with Sowetan, Holeni, accompanied by Ekurhuleni's spokesman Justice Mohale, denied having announced the successful bidder would have to put up a R3-billion guarantee.
"It's nonsense. I dismiss that as nonsense. If someone offered us R3-billion, we would take the money and run. There is no figure," Holeni said.
After Sowetan's persistence, Holeni admitted each bidder would specify how much they would put up as an "upfront" payment.
This upfront payment, Holeni explained, "is to gain the right to collect the municipality's debt".
The winning bid for the contract, which will run for three years, and become effective on July 1, will be announced in April.
Explaining the R75000 price tag for the tender documents, Holeni said the figure would go towards paying for the "legal and financial expertise" of a BEE company that drew up the papers.
AloeCap - the company that compiled the tender documents - initially charged R5-million for the work they did but Holeni said the company "will likely get half a percent of the money collected".
If the entire R8.6-billion were to be collected, AloeCap would be in line to pocket R40.3-million.
Holeni denied the municipality faced financial difficulties and regarded the upfront payment as a fund-raising activity.
molatlhwao@sowetan.co.za
Bidders required to put up R3bn security
BIDDERS vying for a lucrative tender to recover billions owed to a municipality were shocked to discover they would allegedly first need to put up billions before securing the contract.
One businessman told Sowetan that during a briefing session - which was allegedly attended by about 55 people on November 20 - Ekurhuleni metropolitan municipality's director of revenue management and enhancement programme, Miyelani Holeni, announced that the successful bidder would be required to put up a R3-billion guarantee. This had to either be in the form of cash or a bank guaranteed cheque.
The astronomical figure, Miyelani allegedly said, was to secure the rights to the lucrative tender. The businessman who brought the extraordinary tender to Sowetan's attention had just suffered the initial shock of finding out that tender documents alone would cost him R75000.
The figure is quoted in three separate newspaper advertisements, copies of which are in Sowetan's possession.
Last Thursday staff at the municipality's finance department offices in Benoni, east of Johannesburg, unwrapped boxes containing proposals submitted by monied entrepreneurs hoping to clinch the tender.
Eight companies submitted proposals, meaning the municipality may have netted about R600000 from tender documents.
Our source was among those who did not submit a proposal. The tender forms part of the municipality's plans to restructure its debtors book - worth R8.6-billion in October, when the plans were announced.
Yesterday, during an interview with Sowetan, Holeni, accompanied by Ekurhuleni's spokesman Justice Mohale, denied having announced the successful bidder would have to put up a R3-billion guarantee.
"It's nonsense. I dismiss that as nonsense. If someone offered us R3-billion, we would take the money and run. There is no figure," Holeni said.
After Sowetan's persistence, Holeni admitted each bidder would specify how much they would put up as an "upfront" payment.
This upfront payment, Holeni explained, "is to gain the right to collect the municipality's debt".
The winning bid for the contract, which will run for three years, and become effective on July 1, will be announced in April.
Explaining the R75000 price tag for the tender documents, Holeni said the figure would go towards paying for the "legal and financial expertise" of a BEE company that drew up the papers.
AloeCap - the company that compiled the tender documents - initially charged R5-million for the work they did but Holeni said the company "will likely get half a percent of the money collected".
If the entire R8.6-billion were to be collected, AloeCap would be in line to pocket R40.3-million.
Holeni denied the municipality faced financial difficulties and regarded the upfront payment as a fund-raising activity.
molatlhwao@sowetan.co.za
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