Is this fair?

We need some help with this story. We have spoken to several industry players and got no-where. We have been waiting for this particular provincial government department to respond, and three weeks later we are still waiting. And perhaps it's a little naive, but thats the way it is?

The government department in question is the Department of Transport (DoT) in KwaZulu Natal.

This DoT has a Vukuzakhe contact worth about R6m but this is not limited to this specific contract.

Contractors are informed by the engineers that they must have cover through a specific broker before they can continue with the contract.

Most of the contractors already have cover through brokers but the contractors are now being forced by this particular DoT to take out engineering policies with "favourable rates" through a specific broker (Mzao), which is then placed through an engineering underwriter (Terazo).

It appears that the DoT has outsourced all there contracts to a specific broker and insurer/underwriter.

Brokers in KwaZulu Natal sell a number of engineering policies (Contractors All Risks, Liability cover etc), which are then placed through major insurers, like Hollard, CEU (Construction & Engineering Underwriters) and SA Eagle.

Most of the policies are annual, and paid monthly. This particular broker makes about R500 000 per year off these types of policies, which he now stands to lose as a result of the loss of income for new business as well as cancellation of the annual polices cancellation- (annual policies commission even if it is then paid monthly) is paid upfront to a broker.

So we have some questions and would like some input on a couple of issues. Please email me directly at [email protected]

* Is this constitutional, in your mind?
* What happens to the commission earned by the broker - does it have to be paid back?
* If you were one of the brokers involved how would you react?

Editor's thoughts:
*Despite numerous attempts to get a response from The KZN DoT it has been quiet.
*One wonders whether this process could be taken to the competition commission?
*And then there is the question of whether due process was followed and if the two new parties were given the business or responded to a tender and won the business on merit, or not?