State-owned vessel management under the spotlight

Ship management tender uncertainty continues

SOUTH AFRICA: The news that an urgent interdict had been filed against the Department of Forestry, Fisheries and the Environment (DFFE) to challenge the validity of the management tender for the SA Agulhas II and Algoa sent ripples through the maritime industry and once again turned the spotlight on how state-owned vessels are managed.

The industry has not forgotten the impact of the legal challenge to the controversial awarding of the management of the department’s patrol vessels to Sekunjalo Consortium in 2011. The Consortium was eventually withdrawn as the preferred bidder and the vessels were first handed to the South African Navy and to Nautic before finally ending up under the management of SAMSA Maritime Special Projects (MSP) in 2014.  

This latest legal intervention in the tender for the management of the SA Agulhas and Algoa, which was issued in April this year and closed in May, may therefore seem like déjà vu to some. Already the topic of some concern, this latest version of the bid follows two previous calls with the first dating back to 2023.

Citing non-responsiveness as the reason for cancelling the first two tenders, the DFFE may well be regretting their decision as they now face the legal challenge from J*S Maritime Partners who are contending that prospective bidders were not provided with sufficient information to make a competitive bid.

Despite attracting attendance from significantly more interested companies to the tender briefing in April, the DFFE announced that only three submissions had been received by the deadline of 14 May 2025.

Writing to the Minister of Forestry, Fisheries and the Environment, Dr Dion George, at the end of May after the tender had closed, Captain Stefan Bülow, Managing Partner of J*S Maritime Partners outlined his concerns about the process.

Informing the Minister that he had attended the compulsory briefing and had “fully intended” to submit a bid, Bülow noted that he had raised several questions during the session that DFFE officials had committed to answering. Only receiving an answer to one of his questions, he confirmed that other requests for information remained unanswered after the tender deadline.

Captain Bülow’s request that DFFE consider providing an extension for submissions also remained unanswered – and was therefore effectively denied.

Describing the tender as “flawed”, Bülow is seeking to see the current tender process cancelled in its entirety. “Maybe the DFFE, after three potentially unsuccessful attempts in two years, should consider the services of procurement specialists to assist them in putting together an open, fair and transparent tender in which all potential bidders would find themselves on the safe playing field with a referee dedicated to ensuring fairness,” he told Maritime Review in a written response to questions.

None of the companies listed as bidders elected to answer questions from Maritime Review relating to the current process, and the DFFE replied with a blanket quote to all questions citing that, as the matter was before the court, it was “not able to provide a response”.

Areas of concern need to be addressed

Bülow identified several areas of concern that he felt needed to be addressed in order to ensure that all bidders had access to the same information. Noting the large costing discrepancy between the lowest and highest published bids, he believes that this relates to the lack of information provided.

“This costing gap is exasperated when information is not shared,” he contends, explaining that bidders are forced to guess and tend to err on the safe side by quoting higher than the current service provider who has access to information relating to crew costs, maintenance costs and insurance costs.  

Bülow says that his attempts to clarify issues such as insurance claim history, insured value of the vessel, maintenance schedules, the general condition of equipment as well as information relating to crew costs were critical to being able to submit a comparative bid.

“The DFFE expected bidders to quote on equipment never inspected, on a ship never seen, with no planned maintenance date and no previous true spend,” he said.

Pointing to the bid’s evaluation criteria that grants maximum points to bidders who have occupied their “fit-for-purpose” premises for eight years, he notes that this would effectively “bar any new entrants wishing to enter this tender”.

“The effect of this is that a potential bidder may have premises which are more than suitable but they would effectively score minimum points in this section given that they have not had the premises for an extended period of time,” he explains.

“What harm could have been done by providing the required clarity? At worst, the DFFE would have received a more accurate bid,” he concludes.

SAMSA’s status as a ship manager

Questions sent to the South African Maritime Safety Authority seeking clarity on their reasons for not submitting a bid in the latest round were also met with a rather deflective response:

“In response to your inquiries about the DFFE Ship Management Tender, please be advised that the South African Maritime Safety Authority (SAMSA) is currently unable to provide comments on the tender matter.”

The sentiment in the industry, however, is that a number of strategic resignations within SAMSA may have left the authority unable to meet some of the requirements of the management tender. Should this be the case, it will throw some concern on their ability to fulfil their mandate as the current service provider to manage the DFFE’s patrol vessels.

Our questions relating to this function sent to SAMSA were left unanswered in their response which failed to clarify whether Maritime Special Projects (MSP) continues to see itself positioned as a viable vehicle to manage state-owned vessels.

SAMSA also failed to provide clarity around the actual contractual period related to the DFFE patrol and research vessels which it has been managing for over a decade.

PHOTO: The SA Agulhas II and Algoa at the DFFE Berth in the V&A Waterfront. (© Maritime Review Africa)

SAMSA drops out of ship management bid