eThekwini to abide by pipe project ruling

The eThekwini municipality has abandoned its appeal against the KwaZulu-Natal High Court judgment setting aside the award of the R864 million tender for the Western Aqueduct to a joint venture comprising Esorfranki and Cycad Pipelines. The municipality and joint venture partners applied in November for leave to appeal against the whole of the judgment and order for costs. The judgment followed an application by rival JSE-listed construction and engineering companies Sanyati and Group Five to review the award of the tender to the Esorfranki-led consortium. Bernie Krone, Esorfranki’s chief executive, said yesterday he was certain the firm would abandon its appeal, as it would be pointless proceeding without the eThekwini municipality.

However, Dave Gibbons, the managing director of Esorfranki Pipelines, said Esorfranki would be an aggrieved party if the contract was “canned” and it would seek damages. “The contract was canned because of the tender process and not because we did anything wrong. It will most probably be a legal matter. We don’t have a letter canning the job but believe it’s on its way.” Gibbons said the company was in the process of moving off site but had incurred preliminary and general charges when it was awarded the contract and moved on site, including the cost of moving equipment on site and building site offices.

“Obviously while the bun fight was on the go, we had people on site who we had to pay and also had to pay for services such as security and rentals. We’ve been paid in the region of R30m,” he said. Andrew Copley, the project manager for the Western Aqueduct, said the eThekwini municipality had considered its position regarding the high court ruling and taken a decision not to proceed with its intention to appeal the Pietermaritzburg court’s ruling. Copley said the reasons for not pursuing the appeal were the inordinately long time the appeal process took, the high legal costs involved with such a protracted appeal process, and the urgent need to recommence with the construction of the project as soon as possible and mitigate further extensive delays to the project.

“These decisions have been taken in the best interests of the ratepayers and water consumers of the eThekwini region,” he said. In his judgment, Judge Daya Pillay said the actions of eThekwini officials in awarding the tender to the joint venture amounted to “gross negligence, sheer incompetence or lack of capacity”. “Having found that the officials were intransigent and they acted in bad faith, corruption cannot be ruled out,” said Judge Pillay in a judgment that set aside the award of the tender to Esorfranki and ordered the municipality to start the tender process afresh.

The judge ordered eThekwini to pay the costs of Sanyati and Group Five because “this litigation is as a result of the unreasonable and unconscionable conduct of its officials, who triggered and persisted in this dispute”. He also ordered the Durban city government to endeavour to recover these costs “from officials who acted unlawfully or committed misconduct so that taxpayers are not penalised”. Copley confirmed a fresh tendering process had commenced and new tenders would be advertised for the project as soon as possible. Malcolm Lobban, the chief executive of Sanyati, said the firm had “an appetite” to bid for the project and would certainly pursue it if fresh tender documents came out. Krone said he had heard the tender would be cut up into six sections and assumed that Esorfranki would tender for sections of the project if the tender was reissued.