‘Vindicated’ Afrirent to proceed with R1.2bn City of Joburg tender
Fleet management firm says it suffered damage from allegations that its contract with the municipality was awarded irregularly in 2018
Fleet management company Afrirent on Monday said an investigation by the City of Johannesburg had exonerated it following allegations that its R1.2bn contract with the municipality had been irregularly awarded.
The City of Johannesburg earlier in 2019 instituted a forensic investigation following media reports in November 2018 that there had been political influence in the awarding of a fleet management contract to Afrinet, a black-owned company.
The municipality appointed Afrirent on a 30-month contract through a so-called Regulation 32 process, which allows arms of the government to appoint a supplier that is providing services to another state institution without following a competitive tender process.
The municipality opted for the alternative process after it cancelled a fleet management tender that had been awarded to Avis Fleet Services. The city canned the tender process after a report from auditors SM Xulu Consulting pointed out irregularities during the procurement process and recommended its cancellation.
Afrirent CEO Senzo Tsabedze on Monday said the company had been vindicated of any wrongdoing after the City of Johannesburg investigation, which had been carried out by the city’s forensic and investigation unit.
He said the city’s investigation had found no wrongdoing on Afrirent’s part “and that none of the [municipality’s] employees involved in the procurement process were coerced or influenced to award the contract to Afrirent”.
He said as a result of the allegations the company lost financiers and suffered irreparable damage to its reputation. “We will be consulting our legal team to map out a way forward now that our name has been cleared,” Tsabedze said.
He said Afrirent had so far delivered about 40% of the fleet to the municipality “without any assistance from the banks”. He said banks shunned the company after the reports in November.
“It has been tough. We lost potential clients who suddenly did not want to deal with us,” he said.
He said the contract still had another 23 months to run.
In its recommendation following the investigation, the forensic and investigation unit said the municipality should improve its procurement processes.
“The city in future [should] allow ample time for the replacement of contracts, ensuring that there is sufficient time to restart a tender process should the need arise,” it said.