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City of Cape Town loses battle against Aurecon

Years of legal wrangling between the City of Cape Town and the engineering company it had initially hired – and then fired – to decommission the now-defunct Athlone Power Station finally came to a head on Tuesday, with a Constitutional Court ruling against the city. The Constitutional Court dismissed, with costs, the city’s application for leave to appeal a previous ruling by the Supreme Court of Appeal (SCA) in the protracted matter between the municipality and Aurecon Engineering International. Aurecon had been involved in a pre-feasibility study in 2008, and contributed to the bid documents for the decommissioning of the Athlone power station in 2010. However, the city subsequently approached the Western Cape High Court to set aside its own decision to award Aurecon the tender following allegations of corruption and apparent irregularities in the awarding of the tender.

According to court papers, the city’s concerns were confirmed by auditors Ernst & Young, which found the tender process may have been tainted with alleged corruption and irregularities, “particularly due to Aurecon’s involvement in the pre-feasibility study”. According to the Constitutional Court judgment, the Western Cape High Court had ruled in the city’s favour, citing, among others, that Aurecon should have been precluded from tendering for the contract due to its involvement in the preparation of the draft scope of work. The company then filed for leave to appeal the ruling in the SCA, and judgment was delivered on December 9, 2015. The SCA found that the high court’s interpretation of the statutorily prescribed 180-day period was incorrect, observing that the plain meaning of the provision did not support the meaning ascribed to it by the high court.

The SCA also held that since the city had not made a proper case for condonation, the delay was inexcusable and the high court should have dismissed the review application. The allegations were found to be technical. In its judgment, the Constitutional Court found, in part, that the city cannot suggest that it “was not aware of the reasons for the decision prior to receipt of the (Ernst & Young) report”.

Source: www.iol.co.za

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City of Cape Town loses battle against Aurecon

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