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Tender topic

by Aly Verbaan
on 27 Aug 2008
Peoples Post
Peoples Post

TRANSNET yesterday slammed allegations of fraud and deceit of substantial proportion made by the Sunday Times at the weekend as "false, misleading, irresponsible and defamatory", and said it was seeking legal advice and considering its options. The newspaper's editor, Mondli Makhanya, says the publication stands by its story.

This in the wake of the newspaper's claims that Transnet furtively traded in prime coastal property - and Cape Town's premier tourist destination, the V&A Waterfront - in 2006. The Waterfront was bought by Lexshell (a company owned by an amalgam of British, Dubai and local businessmen) for R7 billion, beating other bidders to the prize by an estimated R150 million.

The opposition party, the DA, is alleging that the tender for the sale of the Waterfront was rigged, and is calling for a full-scale investigation into the deal.

DA spokesperson for transport, Robin Carlisle, declared the procurement process "possibly the most unlawful tender of all time", claiming that it had come to light last week that the invitation to tender for the Waterfront was "rigged".

He said that it appeared that Lexshell had been given preferential treatment and was offered pockets of land and sea-bed - including a 22 km stretch of coastline and 90 kmē of sea - that the other bidders were not aware of. It would be necessary to compare the details of the original bid with the final sale agreement to establish this, he said, but Transnet has so far refused to make the contract public.

A top environmental lawyer who drew up the bid for one of the unsuccessful contenders supported Carlisle's allegation, saying that the original offer was for the V&A Waterfront "terrestrial" area, and nothing more. He said the news that Lexshell could own portions of the coastline and sea-bed was surprising, because these were, according to him, not mentioned in Transnet's original offer.

Carlisle further alleges that Lexshell's bid was not the highest offer made, and that the company was given the opportunity to outbid the winner, with "extras" thrown in by Transnet. He said that these, in the form of the disputed land and sea areas, were worth far more than the R150 million that was needed to knock out the other contender, should such a sale have taken place.

The furore broke after the Sunday Times article stated that Transnet had lobbied ANC MPs to exclude a stretch of coastline from the ambit of the proposed Integrated Coastal Management Bill, which is currently before the National Council of Provinces (NCOP). The Bill will render coastal areas within 100 m of the high water mark public property, putting paid to any plans to privately develop these areas in future. Should the disputed land and sea areas in fact have been sold, the implementation of the bill would financially harm Transnet and, by extension, the state, as it would not be able to fulfil its contractual obligations to Lexshell.

But, according to Carlisle, the parastatal's lobbying led to the NCOP scrutinising the deal and apparently uncovering "serious irregularities", allegedly including that Transnet had sold land and sea-bed areas to Lexshell without revealing this to the government.

Meanwhile, NCOP member Freddie Adams (ANC) confirmed that while Transnet had lobbied MPs, it had refused to provide them with the sale agreement as requested. He said that it was the NCOP's intention to pass the bill, regardless of the implications it could have for Lexshell and Transnet.

He said the bill was "quite correct" in aiming to protect public heritage in the form of the coastline, and that while development at ports to aid transport and shipping was understandable, the selling off of such areas for private development was not. Ramos, however, said Transnet did "not own the land under the sea" and consequently could not have sold it.

Whether it was in fact possible to own portions of the seabed in terms of current legislation could not be established. Legal opinion indicates that prior to the Sea-Shore Act of 1935, this may have been possible, but whether such rights had ever accrued to Transnet (then the South African Railways and Harbours Administration) could not be ascertained by the time of going to print Adams said the NCOP would "definitely" pass the Bill without exceptions, which would then go back to the National Assembly, which could make changes, although he felt this unlikely; thereafter the final decision lay with the president.

Carlisle last night dismissed Transnet's denials: "If there is nothing to hide why did she [Ramos] not produce the sale agreement at the conference and put an end to it?".

People's Post approached Anthony Peters, a board member of Lexshell, for comment but he declined the opportunity. Lexshell's attorney, Hendrik Kotze, also declined to comment.


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