The South African National Roads Agency Limited (Sanral) on July 28 held a media briefing to set the record straight on allegations of corruption and to clarify legal issues surrounding the entity’s procurement system.

Speaking at the briefing, outgoing CEO Reginald Demana said the timing of his resignation was not in response to the issues facing Sanral and assured stakeholders that he had not been asked to step down by the new board, which assumed office on March 1.

Rather, Demana said, he had opted to move to a new position in the financial services sector, with the details still unconfirmed.

As previously reported by Engineering News & Mining Weekly, Sanral confirmed last month that Demana had resigned, effective August 31.

Demana pointed out that the roads agency had been on the wrong end of several court cases owing to lapses in its procurement processes and practices.

These cases range from the appointment of certain companies in high-value contracts, as well as panels for Category 2 engineering consultants and Routine Road Maintenance (RRM) contractors.

Sanral had acknowledged the court order last month by the High Court declaring its RRM tender award “unconstitutional and unlawful”, to which the roads agency had conceded.

In November 2024, the roads agency issued a tender inviting interested parties to bid for appointment to a panel of 20 contractors to conduct RRM works across South Africa for a period of five years. Sanral previously had about 251 contractors in its RRM programme.

Last year, a tender process called for the number of contractors to be reduced to 20 to conduct RRM works. The rationale given at the time was that the procurement process would be quicker and that managing 20 contractors would be less complex than managing over 251 contractors.

Bids came in and about 401 tenders were received, and 20 bidders were recommended for the RRM works.

The procurement process culminated in the institution of two review applications by unsuccessful bidders, namely BCB Solutions and Botle Ba Afrika.

Demana explained that Sanral’s concession comes after legal advice indicated that the road agency’s prospects of success were “extremely limited”.

“Accordingly, Sanral agreed to concede to the merits of the applications rather than fight losing battles at the taxpayer’s expense . . .”

There was also prima facie information pointing towards possible and suspected fraudulent conduct at Sanral, including awards to companies that did not appear to exist, or whose addresses and contact details could not be traced, alongside serious irregularities throughout the bid specification, evaluation and adjudication process, Demana said.

Demana said that Sanral had decided to procure the services of RRM consultants and contractors, as well as Category 2 engineering consultants, individually using an open tender process, as the roads agency had done in the past before exploring the panel route.

“We have prepared the tender packs, we are running a live proactive internal assurance process and will be issuing tenders in batches in the coming days. In the Western Cape and Northern Cape provinces, a limited number of tenders have already been issued, signalling our intention to move with speed.

“As some of you would have seen in the settlement court order for the RRM contractor panel, we are required to have completed the appointments of RRM contractors by the end of November and, should it be required, we will go back to court to request for some extensions.”

Demana also addressed social media allegations that as CEO he had unilaterally extended the RRM contracts as he stood to personally benefit.

“For the record, the decision to extend the RRM contracts for six month was a lawful decision of the Sanral board, endorsed at a judicial case management meeting as a pragmatic arrangement.”

Demana asserted that, in his position as CEO, he had never held procurement or tender award decision delegations.

“Every supply chain management (SCM) decision at the centre of this controversy – including RRM contract extensions – was taken by either the Sanral board, or by officials or committees the board delegated that power to,” he stressed.

Demana also pointed out that the roads agency had no accounting officer as a Schedule 3A entity in accordance with the Public Finance Management Act (PFMA), with the board acting as the accounting authority under the PFMA.

“My powers as CEO are delegated by the board and the board can vary or withdraw them at any time.”

Demana also emphasised that every contract extension at issue was a lawful board decision, taken by Sanral after obtaining legal advice and disclosed to the court.

Demana said allegations about two different documents with different values are being investigated by an external law firm to establish the veracity of such allegations.

In addition, he said allegations that Sanral acted against a National Treasury opinion were untrue and that this matter was also subject to an investigation on the implementation of the RRM extensions from December 1, 2025, to May 30 this year.

Demana also said that the disputes between SCM, the CEO’s office and the board over the extensions of the existing RRM contracts led to the board commissioning an investigation into the failure to implement its own decision.

A firm of attorneys requested interviews with several employees, including Demana.

Three SCM officials were suspended for gross insubordination and/or insolation pending disciplinary proceedings, with these pending.

These employees have since taken Sanral to the Labour Court over those suspensions and judgment is awaited.