Coun­cil sued over M120 mil­lion ten­der

Lesotho Times - - News - Billy Ntaote

BIG Bravo In­vest­ments 503 CC has taken Maseru City Coun­cil to court for al­legedly fail­ing to re­turn per­for­mance guar­an­tee doc­u­ments the South African con­struc­tion firm sub­mit­ted when bid­ding for a M120 mil­lion ten­der two years ago.

The com­pany claims in pa­pers filed be­fore the Com­mer­cial Court on 25 Septem­ber 2015 that Coun­cil has ig­nored nu­mer­ous re­quests for the re­turn of per­for­mance guar­an­tee doc­u­ments it sub­mit­ted when bid­ding for the con­tract in Fe­bru­ary 2013.

The ten­der was for re­fur­bish­ing Matala Phase 1 and Ha-le­qele roads in Maseru, and the com­pany’s bid was un­suc­cess­ful de­spite be­ing ear­lier in­formed oth­er­wise.

How­ever, the South African firm is not con­test­ing the ap­par­ent U-turn but only seek­ing the re­turn of the guar­an­tee pa­pers is­sued by Com­pass In­sur­ance Com­pany Ltd.

The per­for­mance guar­an­tee, in­sured to the tune of M11.9 mil­lion, was a com­mit­ment by Big Bravo to sat­is­fac­to­rily com­plete the pro­ject by the set date of Oc­to­ber 2014.

Big Bravo had paid Com­pass In­sur­ance M1.3mil­lion to get the guar­an­tee.

In his court pa­pers, Big Bravo In­vest­ments 503 CC Man­ag­ing Di­rec­tor Mphu­lane Ramorena, said Coun­cil in­formed him that his com­pany had won the ten­der through a let­ter dated 12 Fe­bru­ary 2013. Af­ter the let­ter, he says he was asked to pro­vide the per­for­mance guar­an­tee, only to re­alise that an­other com­pany called Big Bravo Le­sotho (Pty) Ltd owned by Bothata Mahlala had been awarded the con­tract.

Af­ter this re­al­i­sa­tion, Mr Ramorena said he de­manded the in­sur­ance guar­an­tee back but the re­quest went unan­swered. And so were sim­i­lar re­quests by the in­sur­ers, ac­cord­ing to sup­port­ing doc­u­ments in the court pa­pers. Mr Ramorena fur­ther claims an of­fi­cial from the Min­istry of Lo­cal Govern­ment vis­ited the com­pany’s Bloem­fontein premises to as­cer- tain if it had the ca­pac­ity to un­der­take the roads pro­ject. It was af­ter be­ing con­vinced of the ca­pac­ity that Big Bravo In­vest­ments was asked to sub­mit the in­sur­ance guar­an­tee, he adds. He also says it there­fore came as a sur­prise to him that an­other com­pany with a sim­i­lar name had won the ten­der al­though he is not chal­leng­ing this ap­par­ent change of heart in the court. What also wor­ries Mr Ramorena is that he per­son­ally guar­an­teed the in­sur­ance, hence his law­suit to claim the doc­u­ments from Maseru City Coun­cil.

“Fail­ure to hon­our the re­turn of the per­for­mance guar­an­tee puts me at risk be­cause I had signed as per­sonal surety and I have since been se­ques­trated as a con­se­quence of the re­cal­ci­trance of the re­spon­dents here­with,” he notes in the pa­pers.

In one of the let­ters writ­ten to Maseru Town Clerk Man­tai Phaila dated 29 July 2014, Com­pass In­sur­ance Com­pany Lim­ited Man­ag­ing Di­rec­tor Paul Car­ragher, notes: “I re­fer to the con­struc­tion guar­an­tee is­sued by Firedart and Con­struc­tion Gu­ran­tee (Pty) Ltd on be­half of Com­pass In­sur­ance Co Ltd on 9 April 2013, a copy of which is at­tacked hereto for iden­ti­fi­ca­tion pur­poses.

“It has now come to the at­ten­tion of the in­sur­ers that the con­tract for the up­grad­ing of Matala Phase 1 (Matala to Le­qele Bus Stop roads in Maseru) was con­cluded be­tween the City Coun­cil of Maseru and a com­pany called Big Bravo Con­struc­tion (Pty) Ltd of Unit 80 (a) Bedco Of­fice Com­plex, Se­baboleng.

“The guar­an­tee is­sued by the in­sur­ers does not cover that con­tract since it was is­sued to cover the obli­ga­tions of Big Bravo In­vest­ments 503 CC, a close cor­po­ra­tion reg­is­tered in the Re­pub­lic of South Africa.

“You are ad­vised that the in­sur­ers hereby re­call the afore­said guar­an­tee and will not en­ter­tain any claim made pur­suant thereto. Kindly re­turn the orig­i­nal to this of­fice.”

Mr Ramorena noted in the found­ing af­fi­davit that th­ese re­quests were ig­nored, in­clud­ing a let­ter of de­mand writ­ten by his lawyer, Ad­vo­cate Haae Phooofolo, on 18 May 2015.

Mr Ramorena con­tin­ues in the af­fi­davit: “I was made to be­lieve in 2014 that the con­trac­tor, Mr Bothata Mahlala of Big Bravo Le­sotho Pty Ltd, was ar­rang­ing an­other per­for­mance guar­an­tee to re­place the ex­ist­ing one but this looks like it never ma­te­ri­alised.

“Whilst this mat­ter was also a sub­ject of me­dia, pub­lic and po­lice con­cern, Maseru City Coun­cil never made any ef­forts to en­gage ei­ther my­self or the ap­pli­cant com­pany (Big Bravo In­vest­ments) de­spite my con­stant vis­its in my of­fi­cial ca­pac­ity as its man­ag­ing di­rec­tor.

“It is on the ba­sis of this non-en­gage­ment and or de­lib­er­ate in­er­tia on the part of the re­spon­dents that I make this ap­pli­ca­tion be­fore this honourable court and de­mand the doc­u­ments as prayed for in the No­tice of Mo­tion.”

Mean­while, the Le­sotho Times un­der­stands Ad­vo­cate Sale­mane Phafane (Kings Coun­sel) who rep­re­sents the re­spon­dents in the case has since filed a no­tice of in­ten­tion to op­pose Mr Ramorena’s ap­pli­ca­tion.

Con­tacted for com­ment, Com­pass In­sur­ance Com­pany Ltd Head: Le­gal and Claims, Adel Walker told the Le­sotho Times via email: “In terms of our con­fi­den­tial­ity pol­icy, we are not at lib­erty to dis­cuss this mat­ter with ex­ter­nal par­ties”.

Re­peated at­tempts to con­tact Ms Phaila were fruit­less this week.

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