Sanral faces scrutiny over board changes and possible tender award delays

Concerns have been expressed about possible delays in the awarding of tenders by the SA National Roads Agency (Sanral) following its announcement of the reconstitution of the agency’s board.

Sanral reported on Wednesday that two vacancies on its board had resulted in the board restructuring its sub-committees to ensure continued effective governance and operational control.

It said the board faced challenges in maintaining the required composition of key subcommittees as mandated by Sanral’s charters because of the vacancies.

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Sanral said its Audit and Risk Committee (ARC) and Contracts Committee (CC) could not meet their regulatory and operational requirements in terms of their respective charters.

“Due to regulatory constraints that prevent members of ARC from serving on CC, CC will be suspended and matters usually handled by CC will be directed to the full board until further notice.

“Similarly, the Assets and Liabilities Committee (ALCO) will be suspended, with its responsibilities also being handled by the board temporarily,” it said.

Sanral added that to mitigate the impact of CC and ALCO’s suspension, Errol Makhubela has been appointed as an advisor to the board, specifically on matters related to ALCO and CC, due to his extensive experience and prior service on the board.

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“The board believes that this reconstitution will ensure that Sanral continues to operate within the legal framework and maintains its governance standards,” it said.

Sanral said it is committed to filling the vacancies promptly to restore full functionality to all board sub-committees, and further announcements will be made when the vacancies have been filled.

Is Sanral fixing something?

Organisation Undoing Tax Abuse (Outa) CEO Wayne Duvenage on Wednesday expressed concern about possible delays in adjudicating tenders and contract awards because of the suspension of Sanral’s contracts committee.

Duvenage said matters usually handled by the contracts committee will now be directed to the full board, but the contracts committee probably meets more frequently than Sanral’s full board.

He believes Sanral is fixing something and was not surprised by the reconstitution of the board.

“We have said for some time that there are a lot of question marks about what is going on because of the lack of information flow and the adjudication and award of tenders being outsourced to the Development Bank.

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“Something was amiss and they needed to address this,” he said.

Duvenage added that Sanral always had the competence to adjudicate and award tenders and good oversight ability, and the Development Bank’s involvement indicated that it was possibly losing track of or control of its governance.

He said current Sanral chair Themba Mhambi has been in this position for a long time and questioned whether this action should not have been taken some time ago, particularly as it has happened under his watch.

“When all these [board] changes come, maybe it’s time for a new chairperson,” he said.

‘Amber light flashing’

Peregrine Capital executive chair David Fraser was also concerned about possible tender adjudication and award delays, adding that they have already started to notice tender award delays.

“There is now an amber light flashing at Sanral. We need some intervention here to find out what is going on and to sort it out,” he said.

Fraser said tender award delays will negatively impact the construction sector.

“These tenders are critical to getting the construction sector back on its feet and, more importantly, getting jobs created and the economy moving.

“There is a very quick spillover effect from Sanral awarding contracts and the jobs related to those contracts being created, and any further delays just continue to frustrate everyone’s ambition to create jobs in this economy.

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“It’s just another disappointment from them [Sanral],” he said.

Fraser said the Presidency and Operation Vulindlela should be looking at Sanral because any further delays in awarding contracts are “not good for South Africa”.

“It is something that should be attracting their attention for some kind of intervention to see what is going on,” he said.

Operation Vulindlela is a joint initiative of The Presidency and National Treasury to accelerate the implementation of structural reforms and support economic recovery.

Fraser stressed that it does not matter who the project awards go to because there is such a multiplier effect on materials, job creation, and the upliftment of local communities.

Sanral added that the ARC will now be chaired by Refilwe Buthelezi to ensure compliance with statutory requirements, with Thamsanqa Matosa and Rob Haswell continuing as committee members.

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It said an advisor, who will be a qualified and experienced chartered accountant, will be appointed to assist the ARC within the next 14 days.

The Social, Ethics, and Transformation Committee will continue to operate with Matosa and Haswell as members, and Buthelezi will join this committee.

This article was republished from Moneyweb. Read the original here