Work on eThekwini pipeline starts despite tender dispute

Construction of phase two of the Western Aqueduct project in eThekwini – which has been delayed by objections over the award of the project to a joint venture headed by listed Esorfranki – is set to proceed after the lifting of a temporary interdict. The R864 million second phase of the project is the single largest bulk water supply pipeline contract ever undertaken by eThekwini Water and Sanitation (EWS) and has been affected by protracted delays. A joint venture headed by listed Sanyati with Phambili, one of the unsuccessful bidders, was granted an urgent temporary interdict halting all work on the project by the Pietermaritzburg High Court on June 27, the same day the contract awarding the project to the Esorfranki-Cycad Pipelines joint venture was signed by eThekwini municipal manager Michael Sutcliffe. But Judge Daya Pillay’s order stipulated the interdict would lapse if the Sanyati-Phambili joint venture did not provide an undertaking within five days that it would cover all costs should its review application fail, which it failed to do.

Malcolm Lobban, the chief executive of Sanyati, said on Friday that the partners were confident that their objection to the award of the contract to Esorfranki was valid but did not think the risk of providing the required undertaking to the court was appropriate for Sanyati’s shareholders. Lobban said the important thing was that the review application was in court on September 16, which was when the matter would be resolved. Neil Macleod, the head of EWS, last week welcomed the court’s decision to allow construction to resume, pending the review application hearing. “The protracted delays could cost the city hundreds of thousands of rand a day, so it is in the interests of all that the project proceeds. Phase 2 of the Western Aqueduct project is of strategic socioeconomic importance to the Durban region. The city’s water needs are growing and, without significant infrastructural investment, we cannot guarantee there will be sufficient water for the city’s needs in the near future.” The project has so far been delayed by about six months.

Three unsuccessful bidders – Sanyati, Wilson Bayly Holmes-Ovcon and Group Five – lodged appeals and objections when the eThekwini municipality announced the award of the contract to the Esorfranki-Cycad Pipelines venture. Plans to begin construction were put on hold pending the resolution of these disputes and the subsequent court application brought by the Sanyati-Phambili joint venture. Macleod said various procedures and protocols needed to be fulfilled from the outset before any tender was deemed to be compliant. He said important criteria applied in the evaluations of the tenders received included compliance with the conditions of the tender, black economic empowerment participation, price and quality, while the size and scope of the project required the appointment of an experienced and well-resourced contractor.

Macleod said the city remained convinced that the awarding of the tender to the Esorfranki-Cycad venture provided the best quality product at the best price and was the best deal for the city. He said various independent legal experts had reviewed the choice of contractor and reached the same conclusion as EWS. The implementation of the project will significantly strengthen the capacity of bulk water supply to the western and northern regions of eThekwini by injecting 325 megalitres a day, with the capacity to potentially peak up to 470 megalitres a day. The city’s current water consumption is at 950 megalitres a day. The contract is expected to take at least 30 months to complete.