Pretoria High Court: Parks Tau National Lottery Award Invalidated, Re-evaluation Ordered

• The Pretoria High Court ordered Minister Parks Tau to reconsider the fourth national lottery licence award to Sizekhaya Holdings.
• Judge Norman Davis ruled that the minister impermissibly relied on an unauthorized ministerial committee report.
• The court set aside the minister's decision and invalidated the licence agreement, but suspended the invalidity for 12 months.
• The original procurement process, detailed in the RFP, was circumvented by a "parallel process" conducted by the ad hoc committee.
• Unsuccessful bidders Ithuba Lottery and Ringeta Consortium, along with the EFF, challenged the award and aspects of the Lotteries Act.

This judgment highlights the significant legal uncertainty and reputational risks that can arise when public officials deviate from transparent and prescribed procurement procedures, emphasizing the critical importance of process integrity in high-value public tenders.

The Minister of Trade, Industry and Competition, Parks Tau, has been directed by the Pretoria High Court to re-evaluate the bids for the fourth national lottery licence, an award he initially granted to Sizekhaya Holdings in May 2025. This significant ruling, delivered by Judge Norman Davis on Monday, mandates that the minister must specifically disregard a report from a ministerial committee, which he acknowledged had influenced his original decision. Judge Davis explicitly deemed the reliance on this report as impermissible.

While the court invalidated the minister's decision and the subsequent licence agreement, the declaration of invalidity has been suspended for a period of 12 months. This allows the minister six months to make a fresh determination on the licence award and an additional six months to finalize a new agreement, should Sizekhaya not be the chosen entity. Consequently, the Sizekhaya Holdings lottery licence remains active for the time being, ensuring the continued operation of the national lottery. The legal challenge against the Parks Tau national lottery award was initiated by two unsuccessful bidders, Ithuba Lottery and Ringeta Consortium.

The core of the court's decision centered on deviations from the established procurement framework. Judge Davis meticulously outlined the Request for Proposals (RFP), which stipulated a clear three-stage evaluation process: initial bid evaluation, subsequent adjudication, and finally, the minister's decision following consultation with the National Lotteries Commission (NLC). Initially, the evaluation committee had ranked Ringeta first, with the NLC's adjudication committee also recommending Ringeta as the preferred bidder and Sizekhaya as the reserve. However, after a period of indecision, the minister appointed an ad hoc ministerial committee to re-assess the bids.

This newly formed committee subsequently recommended Sizekhaya as the preferred bidder and Ithuba as the reserve, diverging from the initial expert assessments. Judge Davis found that the minister was not authorized by the RFP's provisions to establish such a committee, which effectively ran a "parallel process" of re-evaluation using new consultants and generating new rankings, all without the knowledge of the original bidders. Despite Minister Tau's assertion that this committee merely assisted in addressing existing concerns and its recommendations were not determinative, the court concluded that the results of this unauthorized process were indeed adopted by the minister, influencing his final decision.

The Minister Parks Tau court ruling underscores critical aspects of South Africa public procurement law, particularly the necessity for strict adherence to established tender processes. The Lotteries Act judicial review also encompassed a separate challenge brought by the Economic Freedom Fighters (EFF), questioning the constitutionality of certain provisions within the Lotteries Act concerning the financial interests of political office bearers in bidding entities. These matters were heard concurrently in July this year. Furthermore, allegations of family connections between individuals associated with Sizekhaya and Deputy President Paul Mashatile surfaced in June 2025, prompting Minister Tau to instruct the NLC to investigate. However, Judge Davis noted that no report from this investigation was presented in court during the proceedings.

This judgment highlights the significant legal uncertainty and reputational risks that can arise when public officials deviate from transparent and prescribed procurement procedures, emphasizing the critical importance of process integrity in high-value public tenders.

This ruling highlights the critical importance for lawyers advising government entities or bidders in public tenders to ensure strict adherence to established procurement processes and RFP terms. Failure to do so, particularly through the use of unauthorized committees or parallel evaluation processes, can lead to judicial review and the invalidation of significant public awards, creating legal uncertainty and reputational risk.

Source: Original reporting via legal news coverage