Top court rules in favour of BCM on R74m contract

Decision brings dispute between council, builder on project to an end

A long-standing legal wrangle between the Buffalo City Municipality (BCM) and a Western Cape-based construction and engineering company, Asla, over a controversial tender contract has ended with the Constitutional Court ruling the contract was “unlawful”. The Duncan Village Redevelopment Initiative, reportedly worth R1bn and meant to develop 3,000 houses in Duncan Village, was rubber-stamped in 2009. Between 2011 and 2014, the council had called for three tenders for engineering services and the construction of “housing top structures” in Reeston. The metro later sought an order from the Grahamstown High Court to review and set aside its own decision to award a tender to Asla. The high court declared the award of the R74m contract was patently unlawful and set it aside in 2016. Asla then successfully approached the Supreme Court of Appeals (SCA), which overruled the high court. But on Tuesday the ConCourt handed down judgment in BCM’s application for leave to appeal against the SCA judgment and order. The apex court granted BCM leave to appeal the SCA judgment and declared the Asla contract unlawful. The lengthy saga in BCM saw ex-municipal manager Andile Fani axed after accusations that he had flouted the Municipal Finance Management Act by appointing Asla without following rules. This was after: ● In 2003, BCM decided to address the housing situation in informal settlements in Duncan Village, and Reeston. ● On May 30, 2014, BCM and Asla reached a “turnkey agreement” which required the construction company to provide the housing units for the development. ● In October 2014, the parties once again agreed on engineering services and construction of housing top structures within the Reeston agreement. Shortly after that a dispute ensued and the municipality failed to pay the company for work done in Reeston. This prompted the company to institute provisional proceedings against BCM. The metro council countered, seeking to review and set aside its decision relating to the agreement. The municipality charged that there should have been separate tender and procurement processes before the second agreement was signed. While they ruled in BCM’s favour, five judges of the ConCourt slammed the Metro for acting “outrageously and flippantly” in the course of the saga. BCM spokesman Samkelo Ngwenya did not respond to queries.

Five judges of the ConCourt slammed the Metro for acting outrageously and flippantly