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Ethekwini sued for R20 million by fired fuel firm

ETHEKWINI Municipality is being sued for more than R20 million by a company which until recently supplied it with fuel in terms of a contract worth over R1.5 billion.

Q Tique 27 won the R1.7 billion, eighty ear, fuel-supply tender in 2015 to provide home-bowser and on-road petrol and diesel to 6 600 city vehicles for 96 months. Managing director Abel Modise said he resorted to the legal route after the city “frustrated” all efforts to make payment for services rendered before the abrupt cancellation of his contract in April.

The city has until August 21 to respond to the claim, failing which litigation will ensue in the Durban High Court. “I have handed this matter over to our lawyers. The city says we are in breach of our contractual obligations, yet our problems started when we realised that there were issues in the tender document that put the company in a compromising position.

“Things became worse when we raised our concerns about the omission of dealer surcharge fees, among other things. My company has absorbed those surcharge costs until they terminated our contract and had a replacement the next day without delay. One wonders what processes were followed to appoint the replacement,” Modise said.

The contract, according to the Service Level Agreement (SLA), became effective from August 1, 2016, and was valid for 96 months. According to the papers, on April 14this year Q Tique 27 was informed by its fuel supplier, Masana, that it woulds top the supply unless certain overduea mounts on its account, surcharge fees,were paid.

On April 16, Masana informed eThekwini of its notification to Q Tique27, advising that it intended to stop the supply relating to the city’s on-road account during the week commencing April 20. A week later the city gave written notification of its summary cancellation of the SLA with Q Tique.

The company argued that all previous tenders issued, and agreements entered into by the city relating to fuel supply provided for payment of the surcharge to be made by the city. “The plaintiff (Q Tique) is entitled to payment by the defendant (city) in respect of the surcharge in accordance with the SLA, as rectified, in the amount of R12 662 831.83.

“The plaintiff was able to make the payments required of it in the period August 2016 until April 2020, and in doing so effectively subsidised the defendant and, indirectly, its residents by carrying these costs, anticipating that it would be reimbursed by the defendant,” reads the document.

Source: www.iol.co.za

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Ethekwini sued for R20 million by fired fuel firm

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