Supreme Court of Appeal overturns decision to set aside awarding of Tshwane broadband contract

In a sequel to the City of Tshwane’s contentious broadband contract, the Supreme Court of Appeal has overturned the earlier high court decision to set aside the awarding of the contract to Thobela Telecoms.

The Gauteng High Court, Pretoria, last year said the multimillion-rand broadband contract awarded by the then ANC-led City of Tshwane administration amounted to reckless acquisition. But the Supreme Court yesterday found that the City’s application to have the tender set aside was wrong.

The City initially turned to court to review the decision because it admitted that it failed to comply with its rules, misinterpreted certain statutory prescripts and maladministered its tender process in respect of the appointment of a service provider for a broadband network project. Judge Selby Baqwa, who set aside the Municipal Broadband Network Project contract last year, said it was riddled with irregularities.

The tender was awarded to Altech Radio Holdings, which holds a jointly controlled interest in Thobela Telecoms, which the City contracted for the procurement and installation of the fibre broadband in June 2015. Altech, Thobela and Absa subsequently turned to the Supreme Court to appeal against the high court ruling.

As at 2013, the City owned an existing communications network infrastructure of approximately 500km of fibre. However, that was considered inadequate. The metro then embarked on the project with a view to developing a smart city. The primary objective of this was to improve service delivery as well as lower the costs of government services and operational requirements.

According to the City, the purpose of building a carrier grade broadband network was to support and accelerate the delivery of municipal services, provide socio-economic development and bridge the digital divide. The project was spearheaded by Jason Ngobeni, the then city manager, and Dumisani Otumile, the chief information officer of the City at the time.

At a special mayoral committee meeting held in May 2013, a business case for undertaking the project was presented and approved. This, however, went sour when the DA won control of the City. In 2017, the DA-led administration decided to turn to court to overturn the contract. It said, among others, that the evaluation of the bids was marred by unlawfulness, mandatory processes were not complied with subsequent to the award and the agreements which were concluded could thus not be enforced. Judge Baqwa agreed at the time.

Altech, Thobela and Absa’s grounds for appeal was that the delay by the City in launching the review application is so manifestly and egregiously unreasonable that it cannot be overlooked or condoned. The City did not dispute there had been a delay but argued this was not unreasonable. The application was launched more than two years after the decision to award the tender to Altech, some 16 months after the council had approved the agreement and a year after the tripartite agreement was signed.

Judge VM Ponnan, who wrote the appeal judgment on behalf of a bench of five, had some strong words for the City. He said the fact that the DA took over was not an excuse for the delay in bringing the initial application. “As early as February 2015, Mr (Solly) Msimanga had labelled the project a dodgy deal,” the judge said. Msimanga was campaigning for the DA and became mayor after the local government polls a year later. He now leads the party’s caucus in the provincial legislature. The City has been placed under administration by the provincial executive.

The judge added that the high court was “far too receptive to the City’s case” when it initially ruled in its favour. “Even though armed with the evidence upon which it now relies, the City has sat back over a protracted period, but wants this indifference to be disregarded entirely.

"It had several opportunities to have alerted the appellants to its misgivings or brought review proceedings. It did neither,” the judge said.