Govt admits bungling in SSKIA tender

Brian Benza
Staff Writer | Friday June 7, 2013 00:00

 

Speaking before the Public Accounts Committee (PAC) this week, Kagiso Mokotedi said that because of desperation to finish expansion of the airport before the June 2012 FIFA World Cup hosted by South Africa, there were anomalies in the way the tender was awarded.

The tender was awarded to Sinohydro in April 2008 at an initial cost of P433 million that later ballooned to P555 million.'As government, we were too much in a hurry to compete the project before the start of the World Cup. We did not choose the appropriate procurement strategy and as a result, there were uncertainties right from the onset of the expansion project.

Only the contractor said they will finish the project within a certain time frame and cost but on our part, some of the tender documents   required were not ready.  In the end, we went up for tender without knowing exactly how much we were going to ultimately spend. Additionally, we carried too much risk. We could have chosen a different procurement strategy in which the risk of design and built lies with the contractor and not us,' he said.

The SSKIA expansion project started in 2008 and was supposed to be completed by May 2010 in anticipation of increased passenger and aircraft traffic ahead of the World Cup. But 36 months down the line, the project is still incomplete and government is yet to find a new contractor following termination of Sinohydro's contract last year.Mokotedi said the completion of the project is now estimated to cost P80 million with government having already spent P300,000 to fix a part of the airport roof that was damaged by rain.

'In the completion project, we are going to make sure that we do not make the same mistakes as before. The risk of design and build will be transferred to the contractor and we will try and get all the information so that we avoid these risks,' he added.

Sinohydro's former business manager, Chaofeng Ren told Business Week in 2011 that payment delays, constant variations to original designs and additional works for the project's delayed delivery escalated costs.Following the termination of Sinohydro's contract, government slapped a P64 million penalty on the company by calling up a retention bond worth P21.6 million and a performance bond valued at P43.32 million.

Mokotedi said Sinohydro tried without success to overturn the termination of the contract after the dispute adjudication board threw out the Chinese company's complaint. The initial SSKIA expansion consisted of the construction of a new state-of-the-art terminal building and the extension of the existing runway to comply with the International Air Transport Association's (IATA) requirements.

It is expected that the terminal will be capable of processing up to 900 passengers per hour, while the runway, which was extended by a kilometre, is now capable of hosting large aircraft such as jumbo jets. The new airport will have a new parallel asphalt taxi way of 4km and 33 additional hangar slots.