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A French multinational company has become embroiled in a third tender controversy, this time to produce “smart driving licence cards” at an inflated cost of R898,597 million – nearly double the budget. In this interview with BizNews Wayne Duvenhage, the CEO of the Organisation Undoing Tax Abuse (OUTA), describes how the findings of its investigation into the tender led to Transport Minister Barbara Creecy’s decision to refer it to the Auditor-General (AG) for further investigation. The same company recently had its R115-million contract with Airports Company South Africa (ACSA) terminated. And there have been delays in its delivery on a Home Affairs contract. Meanwhile, more whistleblowers are coming forward with inside information on the latest tender awarded to the company. “So the more evidence we gather, the more we’ll pass over to the Auditor General. Hopefully then to the police and what we’re actually asking for the authorities and the Minister is don’t only cancel this tender, find out who in your department is involved, have disciplinary hearings, fire them if need be and then don’t stop there, have them charged for the criminal conduct that they have instituted.”
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Summary of the interview
A French multinational faces scrutiny over a third controversial tender, this time for producing costly “smart driving licence cards.” In an interview with BizNews, OUTA CEO Wayne Duvenhage reveals how their investigation prompted Transport Minister Barbara Creecy to involve the Auditor-General. The company’s history includes a terminated R115-million ACSA contract and delays with Home Affairs, while more whistleblowers expose its questionable dealings.
Extended transcript of the interview ___STEADY_PAYWALL___
Chris Steyn (00:02.958)
A French multinational company has become embroiled in a third tender controversy. We speak to Wayne Duvenhage, the CEO of the Organisation Undoing Tax Abuse. Welcome, Wayne.
Wayne Duvenage (00:17.113)
Welcome. Thanks Chris. Nice to be with you.
Chris Steyn (00:20.518)
May we start with the findings of your investigation into the tender for the new Smart Drivers License Card Machine, please.
Wayne Duvenage (00:30.936)
Yes, it actually goes back quite some time. But let me start at the beginning, just very briefly, and we won’t go into too much detail. But this Driver’s License Card Account, the DLCA, is the entity within Transport that manages this process. This old plastic card of ours has been outdated for a number of years. And for the past six years or so, this tender has been put out for comment, for requests for proposals and so forth, and cancelled, and put out and cancelled on no less than five occasions.
But I want to take you back to the most recent ones in 2020, around about there, another request for RFI, a Request For Information, was put out for the new Driver’s License Card Account, or card system, the smart card, and then they did another two what they call expressions of interest. So a lot of parties were starting to express interest. And then they started with the bid process or the tendering process. And in March, there were two tenders put out and both canceled again after these expressions of interest. So now you’ve got to start worrying.
And about two years ago, we met with the DG of Transport to express our concerns of a number of things. And one of them was this driver’s license card tender and we said please can you be very transparent with this process. Can we know what the specifications are? Can we see how many tenders there are? Because when this type of behaviour of putting out tenders and cancelling them, which is very costly by the way to the tenderers, they have to put down money, they have to source quotes, they have to, there’s a lot of work in putting especially a technical complicated tender like this. So long story short, we asked, after asking them to be transparent, we heard nothing. They said they would. We tried to engage a number of times in writing and we just got zero radio silence. And then lo and behold, we hear last week, but prior to that, we had started getting information from whistleblowers. And what we could see was this: the last tender that went out was in March of 2023. What they do is they ask their bidders…
Wayne Duvenage (02:54.606)
There were, by the way, 25 people at the tender discussion. They have a briefing. So there were 25 companies of interest, and only five ended up tendering. So that starts to tell you something’s wrong here. But then what happened and what unfolded was that we started getting information about some serious concerns that were unfolding with this tender. The first thing that we started to see happening was that they asked the tenderers to hold their prices and this so-called this validity period, it was first of all a four-month validity period. So after closing the tender end of April, they said for four months, please hold your prices while we deliberate. They then extended that again to another three months, another 90 days. Now this is very tough stuff to have to be asked to extend again.
Wayne Duvenage (03:49.358)
And then one of those extensions, the next one, they did this three times, by the way. So now the original tenders that were in had been held, those prices for over a year. Every time you ask the tenderers to hold their prices while they deliberate, again, just sends a lot of smoke up. What is taking so long? This is not difficult.
And the Treasury’s rules are very clear on this. You you need to close off your tenders and in a very short space of time, generally one validity period allowed to be held. And then if you can extend that, they discourage it completely. Well, this has been going on for three times over a year.
And that’s where you start to realise something is fundamentally wrong. And essentially what they were doing was going through a process that left one organisation standing at the end. It was the only one that had the tender, that passed so-called muster.
And by the way, as I was saying, sorry on those extensions, they asked the companies that were going to have to give their approval because if you don’t approve, if you don’t say, yes, okay, you can extend the validity for another three months, you get knocked out. You get told, okay, well, you’re no longer in the running. I think they were doing this deliberately. And on the one occasion, they gave the company, they mailed them at just after four o’clock in the afternoon…
Wayne Duvenage (05:13.504)
on a Friday and said, please grant us to express your interest in allowing us to extend this validity period for another three months. And we need to hear from you by five o’clock close of business today. Less than an hour for this company to go and get hold of their partners, their other suppliers and say, please, can you hold these quotes for another three months? It’s just ludicrous. Then, Chris, what we did was…
Wayne Duvenage (05:41.806)
When you started getting information from the Bid Evaluation Committee, this is where you start seeing the real manipulation. There’s three points that you start going through. The first one is, do you have all the documentation? Two out of the five lost out there. We’ve actually checked with them. They did have the documentation. But be that as it may, they were disqualified. Three tenderers standing. Now you go through a technical evaluation, of which you need a minimum of 24 points to get through to the pricing round. Well, lo and behold, two of those tenderers lost out in that period. We’ve engaged with them and we’ve asked them, where you lost points. By the way, they didn’t even know that they had, why they had been knocked out or disqualified. And you’re supposed to, government is supposed to let them know you haven’t made it to this one, that these are the reasons.
And sorry, Chris, let me just tell you another thing. In one of those tenders that were canceled, they didn’t even notify the tenderer that the tender was canceled and retended. They had to find out through other means.
I mean, this is just such closed shop, deliberate attempts to keep the number of players participating out. So they are manipulating this process to make sure that one man is left standing. So in the Bid Evaluation Committee process, we see this manipulation.
So we engage now with the tenderers and we say, so you weren’t informed. Do you know that you were knocked out in the first period? No, we didn’t. Well, you were knocked out for these reasons. Why do we know this? We can see the Bid Evaluation Committee documents that we’ve been able to get hold of. These are documents that should have been shared. This is stuff that has to be put out there publicly. And then we see, well, if you had provided these documents, you would have got through. Well, we did. Okay? Well, we need to now start evaluating that. But when there were these three tenderers left and two were canceled or disqualified because they didn’t get enough points. We’ve asked those tenderers, are you sure that you provided the necessary quality of information and clarity around these questions? Because these are the questions you got zero points on. So now, all or nothing evaluation process. And they’ve showed us that they provided all that information. So what happens is the evaluation process is the people will just say, well, okay, we’ll mark this one down here.
Wayne Duvenage (08:07.566)
And so they didn’t get past the 24-point threshold when they should have, as far as we can see. But we need to test this now. And so, Idemia the last company standing, obviously gets the tender. Then we see two bid evaluation reports, one at 762 million Rand, which the Bid Evaluation Committee had indicated was Idemia’s, including that was Idemia’s bid. And we see another one dated the same day, 5th of March, 2024, with another amount, 898 million.
Wayne Duvenage (08:37.07)
So now you see two bid evaluation reports with different tender amounts. This is like, okay, now they’ve won the tender. Let’s see how we can push it up because they’re the last one standing. And it’s just gross manipulation. And one other clear indication of how they were trying to steer this tender towards Idemia, as Idemia’s card printing process is the only one that has a laser engraving printing process because of the card design. But the others don’t do that, but they do equally, if not better, printing methodology. So the mechanisms of printing is not laser engraving, but it’s other technology. And it lasts and it’s got the same robust qualities than the Idemia’s one. So what did…
Wayne Duvenage (09:32.184)
What did the DLCA do? They wrote into the tender specs that your card must have a laser engraving printing process. Now, why would you do that? You should never prejudice other tenderers against a technology that is only open to one when there is no real benefit for the organisation. So what you do, and we see this modus operandi in many places, is they specifically write tenders to push the points towards one supply and lock out all the others.
Wayne Duvenage (09:59.406)
When you add all of this up, Chris, for us, this is gross manipulation of a system to favour one tenderer. Remember, the DLCA had a budget of 468 million for this, and they knew what the price was gonna be because they had all these expressions of interest. And so here we have a tender that wanted to be awarded this week or last week at nearly double that price.
Wayne Duvenage (10:28.462)
So gross manipulation, gross tender irregularities, everything. It’s not just a few red flags. This is red sirens and lights flashing. And so we asked the Minister to please suspend this because it needs to be investigated and halted.
Chris Steyn (10:43.55)
And she acted very quickly on the evidence you presented to her…
Wayne Duvenage (10:49.112)
Yes, I think what I must say, it’s very refreshing to know in the new Government of National Unity to be dealing with ministers that are prepared to open the door and listen. So for the last two to three years, we’ve been trying to engage with the various ministers of Transport, nothing. They agree, yes, we’ll catch up with you, we’ll meet, but nothing happens. They just fob us off completely. Shortly after Barbara Creecy came into office, we wrote to her and said, please, Minister Creecy, we need to meet. It’s not just on this driver’s license matter; there’s so many other issues around SANRAL and board overreach around things that are going wrong, and one of these was this issue. She met with us within a couple of months of her being in office. When we pointed this out to her, she said, give me the facts, give me the evidence that you’ve got. We’ve sent that to her. She’s now passed it on to the Auditor General, obviously to do a real in-depth checking of our facts. And we’re very confident about them, by the way. And we believe that if this tender goes ahead, we have enough here to go to court and interdict the awarding of this contract to Idemia.
Chris Steyn (12:00.166)
Now this very same company got two other contracts. What can you tell us about the contract with Airports Company SA that has now been canceled?
Wayne Duvenage (12:14.028)
Yeah, again, this was raised by people inside and various whistleblowers to the ACSA who initially said, there’s nothing untoward. But when they dug a little bit deeper, I think the evidence that was presented to them was very stark as well and said they can’t go ahead with this tender allocation. They canceled it and they’ve and they’ve suspended this CIO as a result of that. So now this starts to tell you because in their their revelations, they’re saying that there was direct manipulation behind the scenes between the company, the external service provider, and internally.
That alone needs to be verified because if that is the case here, then you would ask yourself, why is government doing business with companies that manipulate and get involved in this tender irregularities and manipulation? And if that’s the case, now, right now, so they should be moving fast to identify that. That company should be put on the Treasury’s Restricted Supplier database and never to be allowed to do business in this country with government again. And sadly, it’s very, it takes ages and sometimes never happens at all for that to take place.
We’re also engaging heaar and engaging with these other companies who had tendered for this driver’s license machine. Local companies, by the way, employing local people, profit staying in this company where Idemia’s profits accrued externally to an international company, which makes this matter even worse. But we find engaging with these with these other entities that Idemia has fallen well short in the Home Affairs contract that they got in conjunction with others. They are years behind in delivery. They haven’t delivered on what they said they would. There has been changes in BEE partners and so forth.
Wayne Duvenage (14:12.312)
So, there’s just so much smoke around this organisation, by the way, that we believe the writing’s on the wall with this contract. And I think if we dig deep enough, Government will ban them from doing business in this country. But we hope they do. That’s what they should be doing.
Chris Steyn (14:28.914)
So obviously you feel this company should be blacklisted from tendering for any government business. Getting these tenders and these contracts, does this mean that this French company has special friends in the South African government?
Wayne Duvenage (14:45.55)
Well, it would seem that way. It would seem that way because, know, when you see the between the last tender that was canceled and the new tender that comes out, one specification, the two specifications changed. One said you don’t need any BEE requirements because the amount is over 50 million. The Treasury had lowered that requirement on these big complex tenders. So that applied to everybody, not just to Idemia.
But when you see a tendering a tender coming out, including the changes from the last tender was canceled, introducing things like technology specific requirements, such as the laser engraving, then you start to realize, how did that slip in there? Why would they put that in there?
By the way, when the DLCA were asked by the others, why are you putting this in here? It’s irrelevant to the tender. It’s not as if our printing mechanisms are any inferior. In fact, they would prove that they are better, but nonetheless, why are you putting a laser engraving technology into the card manufacturing when it’s not required? They couldn’t answer the question.
So to your question, are there people inside the system that are aiding them? That’s the type of behaviour. That’s the type of inclusion into a tender that suggests that there are discussions behind the scene or there are ways to try and favour one tenderer.
We have had reports of the. Bid Evaluation Committee being overseas at the time. Now they say that we’re going to have a look at the system. Well, you don’t go on holidays. You don’t go on travel tours, so to speak, at the cost of and or with the involvement of your bidders. That’s forbidden. I mean, that’s like favouritism. That is like, you just don’t do that type of stuff. So I think the answer to your question is absolutely there is internal assistance in these.
Chris Steyn (16:51.386)
And we’re dealing with different government departments here. So their tentacles must be wide.
Wayne Duvenage (16:59.66)
Yeah, absolutely. So you start to realise how broad it is. And you start to what frustrates us is when we start engaging with the various players involved. I mean, the other companies that we’re tendering are brilliant companies. It’s localised technology, but it’s world class stuff. I mean, some of these companies are doing business for, for instance, Department of Home Affairs or Foreign Affairs on drivers, sorry, passports and so forth. They’ve got the technology. They’ve got all the matters that talk to the security that’s required for these types of things. The stock holding, the efficient processes that get the cards done on time to get to the end users.
And it just astounds us as to why we would do this. And it doesn’t actually astound us in this sense, Chris. We saw it with the E-Toll tender. These companies that are based overseas are going to take the profits overseas. So it’s a nice way to get money out of the country if you’re doing corrupt deals with these organisations. And with the E-Tolls it was Kapsch TrafficCom based in Austria. Well, in this case, it’s Idemia based in France with massive profits, by the way, if those two tender amounts that increase from 762 million to 898 million is a reality and had this never come to light and they got away with that, well, look at how much additional money has been made, so to speak, and taken offshore.
It’s just, it’s outrageous, quite frankly. It’s shocking. And it’s more shocking to know that this is happening to this day and age after the Zondo Commission, after everything that’s been revealed, State Capture and so forth. We’re in a stage now where this should never be happening. And so it tells us that we’ve still got a lot of work to do to get on top of the corruption in this country. We have still got a lot of work to do to make sure that our systems start talking to each other. And we’re seeing this in government. It’s the green shoots under the canoe. There’s some things happening out. Doors are being opened. There’s listening. But we’ve got a long way to go.
Chris Steyn (19:19.11)
But your investigations into this company are continuing, Wayne?
Wayne Duvenage (19:23.458)
Yeah, they are continuing. In fact, since we broke the story last week, more and more whistleblowers are coming forward. More and more evidence, by the way, in some of these tenders where the DLCA told the tenderers, sorry, you didn’t make the next round of tenders.
The last part of the tendering, by the way, is pricing. And those envelopes are sealed. And when those companies came back to say OK give us our documents back if we were disqualified, they said to the authorities at the driver’s license…excuse me, why is our pricing envelope opened? Why has this been tampered with? And they gave them some story and excuse, but you cannot open that envelope if a company has been disqualified in the earlier rounds. You cannot look at the pricing. And they had done so not on one, on more than one of these tenderers. And so the evidence is just big.
So the more evidence we gather, the more we’ll pass over to the Auditor General. Hopefully then to the police and what we’re actually asking for the authorities and the Minister is don’t only cancel this tender, find out who in your department is involved, have disciplinary hearings, fire them if need be and then don’t stop there, have them charged for the criminal conduct that they have instituted.
Chris Steyn (20:42.108)
Thank you. That was Wayne Duvenhage, the CEO of the Organisation Undoing Tax Abuse, giving BizNews viewers the inside story of the controversy linking a French multinational company to a third tender controversy. Thank you, Wayne. And I’m Chris Steyn.
Wayne Duvenage (21:02.222)
Pleasure. Thanks, Chris.
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