Sparks fly over disputed R1.8bn fire-fighting contract

The R1.8bn Working on Fire (WoF) programme has entered a new chapter, with little-known contractor Tefla Group taking control of one of South Africa’s most critical wildfire-fighting operations, even as questions over the procurement process that landed it the contract continue to simmer.

Tefla assumed responsibility for implementing the national programme on August 1, ending more than a decade of continuous service by WoF and its Kishugu-linked operation.

The department of forestry, fisheries and the environment (DFFE) awarded Tefla the contract at a value of R1.8bn after a tender.

Tefla has confirmed the transition has occurred and that it now manages and directs the implementation of the programme.

The transition follows a bruising legal battle in which Working on Fire attempted to stop the department from concluding a service-level agreement with Tefla while it challenged the award.

But in May, the high court in Pretoria dismissed WoF’s urgent application for an interim interdict, clearing the way for the department to proceed with appointment. The court found that WoF had failed to establish the requirements for the interim relief it sought.

The court battle, however, exposed a far deeper dispute over how a tender originally advertised as a five-year contract ultimately became a roughly R1.8bn two-year award covering what would have been years four and five of the original contract period.

Working on Fire argued that bidders had priced their proposals on the basis of a five-year programme and that the department had fundamentally altered the competitive environment by negotiating a shortened arrangement with Tefla.

Tefla disputed this, saying the original scope and deliverables had remained intact and that the department had simply moved to two years because of funding constraints.

The company’s answering affidavit records that the department told bidders in February that the re-evaluation would be based on the original 2022 bids. A further validity period was then sought from bidders before the department entered into negotiations with Tefla.

These negotiations are central to the dispute.

According to Tefla’s affidavit, the department told the company that the project was approaching year four and that it intended to negotiate on the remaining two years of the original five-year contract.

Tefla’s representatives warned that compressing a large-scale national programme originally designed to run over five years into two years would have significant implementation and costing implications.

The department, according to the affidavit, responded that restarting the tender would require another three years of funding that it did not have within the Medium-Term Expenditure Framework.

“The department could not extend the contract period and would therefore focus on the remaining two years, unless a new tender process were initiated.”

Tefla ultimately submitted revised pricing for years four and five. Its affidavit says the original combined costing for those two years was about R1.8bn.

But another layer of controversy surrounds Tefla’s financial credentials.

Working on Fire raised concerns over a letter from Absa submitted during the earlier tender process which stated that the bank had been doing business with Tefla since 2015, despite Tefla Group having been registered in 2020.

Tefla says the discrepancy is explained by the historical relationship between the company and Gau Flora CC, arguing that the banking relationship predated the conversion and restructuring of the business.

Importantly, the department had previously conceded that it made a reviewable error when it failed to query the discrepancy before disqualifying Tefla during the original evaluation.

The court subsequently set aside Tefla’s Phase 4 disqualification and ordered the department to reconsider the tender.

Tefla now argues that WoF cannot use the same historical discrepancy to suggest that the company was found to lack financial capacity.

“The point in the earlier review was that the department should have sought clarification. That is why Tefla’s disqualification was set aside.”

The company also strongly rejects the suggestion that it lacks the expertise to run the programme.

Its answering affidavit points to a management structure that includes Llewellyn Pillay, a consultant who previously served as Working on Fire’s managing director from 2014 to 2017.

Tefla says Pillay was responsible during that period for strategic and operational management of WoF’s national fire-management operations, including the deployment of ground and aerial firefighting resources.

“Tefla accordingly denies WoF’s allegation that Tefla lacks knowledge of, or capacity in relation to, integrated wildland fire management.”

In the latest development, Tefla is now attempting to turn those assurances into an operational reality.

In an August briefing note, it said the implementation structure combines Tefla’s management capability with people who have direct experience of running WoF, as well as specialist technical service providers.

The company says maintaining operational continuity was a key consideration because the programme operates on a national scale during an active fire season.

But the handover has not entirely removed the old operator from the picture.

Recent reporting indicates that Kishugu reached an interim arrangement with Tefla at the end of July to keep key aerial firefighting and training operations running during the transition.

That development is significant because aviation is only one part of Working on Fire, but it is one of its most specialised components.

Tefla itself says aviation is a supporting component of the broader programme and that it is engaging the wider aviation market for additional and alternative capacity.

“The immediate priority has been to avoid unnecessary interruption to available aerial firefighting capability during an active fire season.”

At the same time, questions about the award have not disappeared.

AfriForum has pursued access to the procurement records under the Promotion of Access to Information Act (PAIA), seeking to establish how Tefla was evaluated and whether it had the specialist personnel, equipment and operational capacity required to run the national programme.

The organisation’s intervention means the controversy has now moved beyond the courtroom battle between the competing service providers and into a broader question of public accountability over a multibillion-rand government procurement project.

For Tefla, however, the immediate challenge is no longer winning the tender, it is proving that it can deliver.

At this stage, AfriForum is not in a position to say conclusively that the procurement process was unfair or unlawful. That is precisely why we requested the documentation from the department. We believe there are sufficient questions around the appointment of Tefla Group to warrant proper scrutiny of whether the process was fair, transparent and competitive.

—  AfriForum spokesperson Tarien Cooks

WoF is not simply an aviation contract. The programme encompasses the recruitment and employment of EPWP (Extended Public Works Programme) participants, training, wildfire prevention, fuel-load reduction, ground-based suppression, community awareness, equipment, occupational safety and operational command across the country.

That makes the R1.8bn contract about far more than which company won a procurement process. It is about whether the transition from an operator with more than two decades of institutional experience can occur without weakening South Africa’s ability to respond when the next major wildfire starts.

Tefla insists the transition should not be interpreted as a withdrawal of firefighting capacity and says it is progressively establishing the operational structure needed to fulfil its contractual obligations.

“The focus remains on maintaining the prevention, preparedness and response capability required to support communities, landowners, fire protection associations and other stakeholders.”

AfriForum spokesperson Tarien Cooks said the organisation had therefore lodged a PAIA application seeking the full procurement record, including the bid submissions, evaluation and adjudication reports, contracts, service-level agreements and correspondence relating to the award.

“At this stage, AfriForum is not in a position to say conclusively that the procurement process was unfair or unlawful. That is precisely why we requested the documentation from the department.

“We believe there are sufficient questions around the appointment of Tefla Group to warrant proper scrutiny of whether the process was fair, transparent and competitive.”

Tefla’s legal adviser, Rea Khoabane, said the company had taken responsibility for the programme last month after its appointment by the DFFE, with operational continuity remaining a priority during the transition.

“Tefla remains responsible and accountable to DFFE for implementation in accordance with the applicable contractual framework,” she said.