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Leaked correspondence shows RTMC head was concerned new e-Natis contract would be irregular and unlawful
Correspondence also shows that share interests of private company was taken into consideration by Department of Transport in awarding tender
DA will be writing to the chairperson of SCOPA concerning prima facie violation of the Public Finance Management Act





The Democratic Alliance (DA) has been leaked correspondence between the Department of Transport (DoT), the Road Traffic Management Corporation (RTMC) and Tasima, the company responsible for the management of e-Natis, in the lead up to the renewal of that company's contract for the management of the e-Natis system in May 2010. The correspondence does not suggest wrongdoing on the part of Tasima, but shows that the Department of Transport renewed their contract, in spite of a serious breakdown in services being offered, and warnings from the Road Traffic Management Corporation's Acting Chief Executive Officer that the contract renewal would be "irregular" and "unlawful".

A copy of the leaked letters is available online.

The correspondence reveals that the perfectly legitimate request made by Mr. Letsoalo, the Acting RTMC CEO, for the tender to be advertised publicly was turned down, and that the Director General of the Department of Transport, Mr. George Mahlalela, awarded Tasima with a five year contract. A further reply to a DA parliamentary question reveals that the contract was also awarded without going to tender - even though Tasima's previous contract had expired in 2008, and the Standing Committee on Public Accounts had raised concerned about contract not being readvertised.

The contract to manage the e-Natis system was originally awarded to Tasima in December 2001 and eventually lapsed in May 2008. They had since been working with the Department of Transport on a month-on-month maintenance contract until the beginning of 2010.

In a letter on 4 May 2010, Mr. Thwala, the Department of Transport's Deputy-Director of Transport Regulation, Accident and Incident Investigation, claimed that the Tasima contract would not be readvertised because it was a running contract. This was, obviously, not the case, since the Tasima contracted had lapsed in 2008. He also, breathtakingly, suggests that "it is in the best interest of e-Natis and [Tasima's] new shareholders to renew the current contract"- though he provides no reason why the Department of Transport should be interested in the shareholders of a private company. Subsequently, the departmental Director General overruled requests for readvertising the tender, and awarded a five-year contract.

This raises a number of questions.

Firstly, if the Department of Transport genuinely believed that no other companies could match Tasima's performance and costs, what did they stand to lose by going to tender? Tasima would have simply rewon the contract.

Secondly, why were the shareholders of a private company apparently a matter of concern to the Department of Transport?

Thirdly, why was the contract re-awarded, even while the RTMC believed it was irregular and unlawful?

The DA will be writing to the Chairperson of SCOPA, Mr. Themba Godi, requesting an inquiry into a prima facie violation of the Public Finance Management Act (PFMA). The DA has already submitted further parliamentary questions to probe this matter, and we will call the Director-General of the Department of Transport to appear before the portfolio committee on transport.

The correspondence reads as follows:

Letter 1: 12 April 2010 - Letter from Tasima to the Deputy Director of Transport Regulation, Accident and Incident Investigation, Zakhele Thwala. Tasima requests an extension of the e-Natis contract
Letter 2: 28 April 2010 - Letter from the Acting CEO of the RTMC, Collins Letsoalo to Mr. Thwala. Mr. Letsoalo writes: "[T]he TASIMA contract is long overdue for re-advertisement to give other service providers a chance to participate. The rates by TASIMA are also very high especially for a maintenance contract. DoT simply cannot afford it. SCOPA has raised some concerns about this contract and that it should be advertised. We cannot go any other way...I therefore do not support it."
Letter 3: 4 May 2010 - Mr. Thwala responds to Mr. Letsoalo. He provides four reasons for not re-advertising the e-Natis contract: Firstly, that "we cannot advertise a contract that which is running". Secondly, that "TASIMA has recently bought shares from arivia.com at cost". Thirdly: "Attracting and retaining staff is essential for the system guarantee." And finally, that: "A new contractor will only maintain the current system." He concludes that "it is in the best interest of e-Natis and new shareholders to re-new the current contracts, is my view and as for SCOPA I will take responsibility."
Letter 4: 5 May 2010 - Mr. Letsoalo responds to Mr. Thwala. Firstly, he points out that "change of ownership cannot be used as an excuse to extend a contract." Secondly, that the interests of "new shareholders" are irrelevant ("I am ... puzzled by you articulation on the interests of the shareholders of TASIMA, frankly their interests should not worry us"). Thirdly: "My understanding is also that the new team is less experienced than the original team that was deployed." Mr. Letsoalo says that "maintenance of a system is a... service and must be subjected to procurement processes in a fair, equitable, competitive, transparent and cost effective manner."
Letter 5: 7 May 2010 - Thwala responds to Letsoalo, reiterating his concerns for the shareholders of Tasima.
Letter 6: 11 May 2010 - Thwala writes to the Director-General, George Mahlalela. Thwala writes to the D-G requesting that he extend the e-Natis contract for a five years
Letter 7: 12 May 2010 - Mr. Mahlalela, the D-G, writes to Tasima, informing them that their e-Natis contract has been extended effective 1 May 2010
Letter 8: 21 May 2010 - Letsoalo writes to Tasima, asking them to ignore the letter from the D-G, warning them that following the D-G's instructions will result in engaging in ‘unlawful behaviour.'