In July 2015, Centurion Bus Manufacturers (CBM) scored a R31-million contract to buy and convert seven buses into mobile veterinarian clinics for the Department of Agriculture, Land Reform and Rural Development (DALRRD).
Eleven years later CBM has delivered not one of the seven buses.
Approached for comment, lawyers acting for the company told amaBhungane, “Kindly take note that there is pending litigation between CBM and [DALRRD]… The issues raised in your correspondence form part of the subject matter of the litigation and are therefore sub judice.”
Investigations by the Auditor General of South Africa (AGSA) and by amaBhungane show the bid award process was suspicious, and the execution of the contract, signed on 10 July 2015, was riddled with delays and irregularities.
Between September 2015 and April 2016, the Department paid out about R26-million of the contract value, despite the fact that the CBM did not adhere to the contractual terms by providing proof of contract insurance.
According to information obtained by amaBhungane it appears that one senior official, Mooketsa Ramasodi, played a central role in the awarding of the contract – and had responsibility for implementing the remedial steps ordered by the AGSA in 2019.
Ramasodi was then the Department’s Deputy Director General for Agricultural Production, Health and Food Safety and now has risen to become Director General.
Ramasodi chaired both the bid specification committee and the bid evaluation committee (BEC), and, an internal report suggests, sat as an ordinary member of the bid adjudication committee too.
The Department disputes this last point.
DoA confirmed his leading role on the bid specification and bid evaluation committees but argued there was “no provision that prohibits participation at both levels”.
However, the Department denied that Ramasodi sat on the final bid adjudication committee.
This claim is contradicted by an internal document in amaBhungane’s possession that the deputy director of internal control signed on 9 July 2024, listing Ramasodi’s name on all three committees.
This is backed up by the Department’s own earlier bid committee memorandum.
One person chairing both the specification and evaluation committees while also sitting on adjudication lets that individual shape requirements, judge bids against those requirements, and then help approve the award.
AmaBhungane has noted that the chair of the bid adjudication committee was named as a Mr JB Hlatshwayo.
Jacob Basil Hlatshwayo, the former chief financial officer of the Department, was sentenced to four years in prison in February 2025 in relation to a R10.8-million abalone corruption case dating back to 2017.
But, in fact, the bid adjudication committee was left with little choice by the evaluation committee that Ramasodi chaired: they disqualified all seven other bidders, leaving only CBM still standing.
Collusion?
As early as 2016, the AGSA had raised its own concern about the bid process.
There were eight bids that responded to the invitation by the Department.
Micheal Vermeulen, the director of CBM, submitted one bid on behalf of the company, and interestingly, submitted a second through a joint venture with Phetolo Health Consortium.
The bid evaluation committee, chaired by Ramasodi, was meant to catch that kind of overlap.
But it didn’t.
A July 2019 AGSA report on the bus debacle, which amaBhungane has seen, found Ramasodi and his committee wanting.
“BEC officials did not apply proper due diligence when examining/evaluating bid proposals. Furthermore, the BEC members did not identify instances of possible collusive tendering practices,” the AGSA found.
In the 2019 report the AGSA reproduced a portion of its 2016 report which flagged the fact that Vermeulen submitted two bids: one on behalf of CBM and the other as a joint venture.
The AGSA was of the view that this was “in contravention of paragraph 4 of the Competition Act No. 89 of 1998, which prohibits horizontal practices” – in other words: collusive tendering.
Both bids had carried signed declarations stating that each had been reached independently and without consultation with a competitor.
For this suspected breach, the AGSA recommended that “management should report the possible collusive tendering to the Competition Commission for investigation”.
In 2016, the Department disagreed with the finding, saying “there was nothing wrong” with the parallel bids.
It noted that no Treasury Instruction or Regulation provided guidance to departments on the process to be followed where possible bid collusion might be detected.
Nevertheless, it promised to report the matter to the Competition Commission.
In the 2019 report the AGSA noted that the matter was indeed reported by the Department in 2016, however no response was received: “Evidence could not be provided [by DoA] with regard to follow-ups being made with the Competition Commission.”
Seven years later, amaBhungane checked with the Competition Commission directly.
It told us it had no record of any such complaint.
Eventually, the tender went to CBM alone.
The seven specially outfitted buses, weighing between 28 and 32 tonnes, were supposed to be delivered to seven provinces.
However, more than a decade later, there is nothing to show for it – and the department has limited recourse because it did not ensure compliance with one of the most basic terms of the contract.
No valid insurance
Because the contract covered specialist goods, the Department could pay CBM in parts before delivery, provided one of three conditions was met:
● A 50 percent upfront payment backed by a bank guarantee; or
● Part payment against invoices backed by valid comprehensive insurance covering the full bid value, or;
● Payment once functional trucks were delivered.
These conditions were inserted so that the public money could be safeguarded in case CBM went rogue or any unforeseeable delays emerged. CBM met none of the three conditions.
No bank guarantee.
No insurance.
No functional trucks.
The Department paid upfront anyway. It appears as if the infringement, at least from the side of the Department, was quite deliberate. They did not pay once, but five times over.
The first infringement was an R8-million payment on 25 September 2015, followed by two tranches of R3-million, paid on 5 October and 25 November 2015, respectively.
From what we could deduce from the R8-million payment, CBM bought seven trucks from Mercedes Benz.
Mercedes-Benz South Africa no longer owns the commercial vehicle business. We were referred to Daimler Truck Southern Africa Limited.
Daimler Truck did not respond to amaBhungane’s questions about whether it received the R8-million payment for the trucks.
The other two tranches were earmarked for the mobile clinic body and for the chassis extension, wheelbase, and rear overhang.
The Department did not stop there. They went on to pay another R8-million invoiced for scientific medical equipment in February 2016 and R3-million for body panels that April.
In total, the Department paid CBM a total of R26 854 411, without ever confirming the roughly R31-million valid insurance the deal required.
Meanwhile, in the words of the 2024 internal report, “The project faced significant delays and extensions, culminating in legal action and repeated failures to deliver the trucks. Despite court orders and extensions, the supplier struggled with cash flow issues, leading to further delays.
“The contract’s extensions and performance monitoring lacked proper oversight. The supplier’s non-performance and contract breaches should have resulted in penalties or contract termination. However, these measures were not invoked.”
The Department simply went through the motions. In 2016 it instituted a high court action to compel the supplier to perform, but the summons was never delivered.
The excuse? The supplier had moved and could not be found at the address known to the Department.
The AGSA noted dryly: “The new premises… were known to some employees of the department. It is unclear why the summons was therefore not sent to the new premises of the service provider.”
2019: The AGSA draws a line
On 10 July 2019, the AGSA and two Department officials met with CBM to understand why the company repeatedly failed to deliver on its promises, despite the half-built vehicles and equipment sitting at their premises.
The company told them that it had struggled with cashflow almost from the start of the contract and had failed to secure finance from local banks.
“The service provider (CBM) is due to travel to China over the weekend in a bid to persuade a Chinese foreign investor to inject finance into the business in order to rescue the company,” the AGSA added.
Asked when the trucks would be delivered, the company said that depended on whether the finance came through (it never did).
The AGSA warned about what could follow: “There is a high risk of the service provider being liquidated resulting in the trucks and the medical equipment being attached to settle creditors and the department suffering losses for the payments made.”
The AGSA made clear findings and recommendations.
“We are of the opinion that payments to the service provider amounting to R26 854 411 paid to the service provider is expenditure that was made in vain and could have been avoided had reasonable care been taken,” the AGSA found.
“The daily and monthly controls in certifying invoices received for payment were inadequate,” the AGSA found, adding that officials “were either negligent or unintentionally approved the payment to the service provider despite the conditions of the contract being met.”
The AGSA told the Department that consequence management should be implemented where payments were inappropriately approved and that it should ensure legal action against the supplier was reinstated.
The official named in the AGSA report as being responsible for implementing corrective action? Ramasodi.
The Department told amaBhungane the project manager who signed off on the payments passed away in May 2016. It also said it has not taken any disciplinary action over how officials processed the payments.
The Department did however institute a new claim against CBM, but as we’ll see, that case has gone nowhere slowly.
No trial date
The Department gave formal warning to CBM in January 2020 and filed a fresh summons that August, finally served on CBM in October 2020.
Interestingly, the company argued in court that it did not deliver the buses because the Department owed about R1.76-million for a maintenance plan invoiced back in August 2016. But this is a stark contradiction as they told AGSA they had financial challenges and had been waiting for a potential investor in China.
The buses should have been delivered by 30 April 2016, and because CBM failed to deliver, it is unclear why they blame the Department for their noncompliance with the contract terms, or even invoiced for maintenance plans of buses the Department had not received.
The State Attorney only applied for a trial date in September 2024, four years after summons was served.
According to the Department’s response to amaBhungane’s questions, a directive from the Judge President had required the parties to first attempt mediation before the case can proceed.
Two years later, there is still no trial date.
The Department told amaBhungane, “It must be noted that the State Attorney attempted to obtain a trial date from the court, however, she was informed that the court directives require that the parties engage in mediation in terms of Rule 41A of the uniform rules of the court before the matter can be set down for hearing.”
The State Attorney then proposed mediation formally. The company agreed in principle. But it asked for broader terms than the State Attorney first offered.
The Department says the State Attorney is now working through its own procurement process to appoint a mediator.
It is clear that if these vehicles ever actually get on the road, they will be more than a decade old before they have travelled a single useful kilometer.