Outgoing South African National Roads Agency Limited (Sanral) chief executive Reginald Demana has admitted that serious procurement failures left the roads agency with little chance of defending several court challenges, while rejecting allegations linking him to R9.5-billion in irregular expenditure and corruption.
Demana said Sanral had been forced to concede multiple cases after internal and external lawyers advised that its prospects of success were “extremely limited”.
“Sanral has been on the wrong end of several court cases owing to lapses in its procurement processes and practices,” Demana said during a media briefing on Tuesday.
The cases involved high-value contracts and panels established to appoint routine road maintenance contractors and category 2 engineering consultants.
Demana said Sanral chose not to spend taxpayers’ money defending procurement decisions that could not survive judicial scrutiny.
“Sanral agreed to concede to the merits of the applications rather than fight losing battles at the taxpayer’s expense,” he said.
Alleged irregularity in road maintenance contracts
The most serious failures emerged in Sanral’s proposed five-year panel of 20 road maintenance contractors. The agency received 401 bids after deciding to replace approximately 251 individual contractors with a smaller national panel.
However, an investigation found that tenders were not opened within the period prescribed by Sanral’s rules, price competition had been excluded and race became the determining factor when selecting 20 companies from 61 functionally compliant bidders.
Demana said Sanral had also received prima facie information suggesting possible fraud, including awards involving companies that appeared not to exist or whose addresses and contact details could not be verified.
“Given the irregularities identified, Sanral itself proposed to the Court, and the respective parties, that the tender is declared constitutionally invalid, reviewed and set aside,” he said.
The agency will now abandon the panel model and return to procuring road maintenance contractors and engineering consultants individually through open tenders.
Demana also rejected allegations that he unilaterally extended the contracts of existing road maintenance companies because he stood to benefit.
“For the record, the decision to extend the RRM contracts for six months was a lawful decision of the Sanral Board,” he said.
He maintained that he never held the procurement delegations required to award contracts or approve extensions independently. The extensions were intended to prevent road maintenance from stopping while litigation continued.
Demana said three supply chain management officials were suspended after allegedly refusing to cooperate with a board-sanctioned investigation into delays in implementing the extensions. Disciplinary proceedings remain pending, and the officials are presumed innocent.
Demana rejects R9.5 billion in corruption
He also rejected claims that R9.5-billion in corruption occurred under his leadership.
Demana said the figure referred to historic irregular expenditure linked to road maintenance contracts awarded between the 2011/12 and 2018/19 financial years, long before he joined Sanral in 2023.
“Despite that irregular expenditure, Sanral received unqualified audit opinions throughout the relevant period, because no confirmed irregular expenditure was linked to fraudulent or criminal intent,” he said.
Demana further dismissed as fabricated a social-media audio recording which allegedly identified him as a beneficiary of irregular tenders.
“It is not authentic,” he said. “Not one piece of evidence, not one that I am aware of has been produced to support it.”
Sanral plans to issue replacement tenders in batches and has already advertised some contracts in the Western and Northern Cape. The agency must appoint new routine maintenance contractors by the end of November.
ALSO READ: Court scraps Sanral’s R9.5bn roads tender as agency concedes unlawfulness
- Outgoing Sanral CEO Reginald Demana admitted significant procurement failures led to losing multiple court cases but denied involvement in R9.5 billion in corruption.
- Failures included irregularities in awarding a five-year panel of road maintenance contractors, with issues in tender opening times, exclusion of price competition, and race-based selection.
- Sanral proposed courts declare the contested tender invalid and decided to abandon the panel model, returning to individual open tenders for contracts.
- Demana rejected claims that he unlawfully extended contracts for personal gain and said contract extensions were board-approved to maintain road maintenance during litigation.
- He dismissed allegations linking him to historic irregular expenditure, clarifying these occurred before his tenure and no fraud was proven; disciplinary actions are underway for non-cooperative officials.
Demana said Sanral had been forced to concede multiple cases after internal and external lawyers advised that its prospects of success were “extremely limited”.
“Sanral has been on the wrong end of several court cases owing to lapses in its procurement processes and practices,” Demana said during a media briefing on Tuesday.
Demana said Sanral chose not to spend taxpayers’ money defending procurement decisions that could not survive judicial scrutiny.
“Sanral agreed to concede to the merits of the applications rather than fight losing battles at the taxpayer’s expense,” he said.
However, an investigation found that tenders were not opened within the period prescribed by Sanral’s rules, price competition had been excluded and race became the determining factor when selecting 20 companies from 61 functionally compliant bidders.
Demana said Sanral had also received prima facie information suggesting possible fraud, including awards involving companies that appeared not to exist or whose addresses and contact details could not be verified.
“Given the irregularities identified, Sanral itself proposed to the Court, and the respective parties, that the tender is declared constitutionally invalid, reviewed and set aside,” he said.
Demana also rejected allegations that he unilaterally extended the contracts of existing road maintenance companies because he stood to benefit.
“For the record, the decision to extend the RRM contracts for six months was a lawful decision of the Sanral Board,” he said.
He maintained that he never held the procurement delegations required to award contracts or approve extensions independently.
Demana said three supply chain management officials were suspended after allegedly refusing to cooperate with a board-sanctioned investigation into delays in implementing the extensions. Disciplinary proceedings remain pending, and the officials are presumed innocent.
He also rejected claims that R9.5-billion in corruption occurred under his leadership.
Demana said the figure referred to historic irregular expenditure linked to road maintenance contracts awarded between the 2011/12 and 2018/19 financial years, long before he joined Sanral in 2023.
“Despite that irregular expenditure, Sanral received unqualified audit opinions throughout the relevant period, because no confirmed irregular expenditure was linked to fraudulent or criminal intent,” he said.
Demana further dismissed as fabricated a social-media audio recording which allegedly identified him as a beneficiary of irregular tenders.
“It is not authentic,” he said. “Not one piece of evidence, not one that I am aware of has been produced to support it.”
Sanral plans to issue replacement tenders in batches and has already advertised some contracts in the Western and
ALSO READ: Court scraps Sanral's R9.5bn roads tender as agency concedes unlawfulness
