Multi-million SA Express contract with North West awarded without tender, inquiry told

The SA Express contract to operate Mafikeng and Pilanesberg airport was awarded without following due procurement process, the Zondo commission of inquiry into state capture heard on Friday.

The five-year contracts were entered into in 2015, between the airline and the North West Department of Safety and Transport. The contract stipulated that department was to make a pre-payment subsidy of R112m in the 2014/15 financial year. 

The Head of Department in the Department of Community Safety and Transport, Kutlwano Phatudi, told the inquiry that a decision to award the contract was taken without going on tender, in a process which she said she objected to.

According to Phatudi, in 2014, four airlines made presentations before officials from her department, the Office of the Premier, Provincial Treasury and the Department of Tourism.

After the meeting, a memorandum was then sent to Department of Community Safety and Transport Executive Committee, recommending the appointment of SA Express as the preferred service provider.

She said the it was against the norm to seek Exco approval for a service provider.

“My view was that this should go on tender, in order to get the best option. It was a first project of this kind, and we did not know much about it,” said Phatudi during her evidence. She said he view was not taken into consideration.

Judge Raymond Zondo wanted to know if there she had any idea what motivated the department to deviate from the normal procurement process.

Phatudi said she had no idea, and it had not happened before that such deviation was adopted.

The contract with SA Express was signed on March 31, 2015; however, she said she came to know about it when she received an invoice of R50m from SA Express, together with a R20m claim from an Koroneka Trading and Projects, an entity appointed to handle ground services at both airports.

“At the time the department did not have budget for the payment,” said Phatudi.

The head of department then wrote to the office of then-premier Supra Mahumapelo, asking it to pay the R50m bill on its behalf.

Evidence heard on Thursday revealed that SA Express was also paid a marketing fee relating to costs incurred in the process of developing the route, as well as for marketing the flights before their launch.

The inquiry will continue on Saturday.