The awarding of eight multimillion-rand contracts for flood repair work, amounting to R53m, by the Nelson Mandela Bay municipality is unlawful and void.
This is according to a legal opinion provided to the municipality on Monday.
Advocate Olav Ronaasen SC, in his leaked legal opinion, suggested that work should not start on the projects.
“I conclude that the award of the informal tenders was inconsistent with the constitution and, therefore, unlawful and void,” he said.
“In this case, it would be required of the municipality to take prompt steps to review and set aside the award of the informal tenders on the basis of legality.
“My advice is for the municipality to issue instructions for that process to commence without delay.
“Work on the problem areas could have commenced by mid-January 2025 at the latest and would have been far advanced by now.
“The emergency which underpinned the deviation, in fact, did not exist given the triennial tender.”
The city sought a legal opinion after a memorandum, written by public health boss Sizwe Mvunelwa, detailed a series of events which led to the metro advertising an informal tender even though it already had an active triennial contract with companies to do the work.
He accused seven senior managers of potentially colluding to deliberately mislead the city manager’s office into hiring new companies to do urgent flood damage repair work when there was already a valid contract in place.
The work relates to the June and October floods which wreaked havoc in KwaNobuhle, Kariega and Kwazakhele, the hardest hit areas in the metro.
The municipality was allocated R53m from a Municipal Disaster Response Grant by the National Treasury to do critical infrastructure repair work.
An additional R89m was allocated to fix the Matanzima Bridge in KwaNobuhle.
The R53m was deposited into the metro’s coffers in November on the condition that the money was spent by the end of May.
But instead of using companies which had a triennial contract with the city for roads and stormwater projects, the city decided to deviate from this and invited informal bidders to award eight projects.
Three companies, Kayalihle Trading, Siyaya Khaya Construction and the BLB JV Group, have since threatened legal action if the municipality uses the informal bidders, saying they deviated from the standard tender procedures by ignoring valid contracts in place.
Ronaasen said the Constitutional Court was clear — where an organ of state such as a municipality acted unlawfully, it must, without delay, take steps to remedy the situation.
“The award of the informal tenders would also be susceptible to review at the instance of the complainants on any number of grounds.
“The municipality would have no valid defence to such an application, would also be faced with an adverse costs order, which would be viewed as expenditure irregularly, alternatively, fruitlessly and wastefully incurred.”
He said it could not be disputed that the qualified complainants were in place and able to undertake the work contemplated by the informal tenders by October 2024, or December 2024 when the council approved the budget for the projects.
According to the municipality’s supply chain management policy, Ronaasen said, any procurement of goods, services or works exceeding R200,000 must undergo a competitive bidding process.
He said clause 36 of the policy allowed for a deviation in an emergency or exceptional case where it was impractical or impossible to follow the procurement processes.
“There is no dispute that the triennial tender was validly awarded.
“Tenders in the nature of the triennial tender are also described as and when contracts.
“That means that the contractors holding appointments in terms of the triennial tender are utilised on an ad hoc basis for projects in the clusters to which their appointments apply.
“Furthermore, the municipality is bound by the terms of the contracts which arose from the awarding of the triennial tender.
“Thus, where, as in this case, the scope of works covered by the triennial tender is identical to the scope of works envisaged by the informal tenders, the municipality was obliged to use the services of the suitably qualified complainants and was not required to advertise tenders for new contractors.”
He said putting out tenders for work covered by the triennial tender would defeat the purpose of having them in place.
“Clearly the costs attendant on the advertisement of tenders and the subsequent appointment process would in the circumstances have been incurred irregularly, alternatively, fruitlessly and wastefully.”
One of the seven senior managers accused, municipal chief financial officer Jackson Ngcelwane, , said the law firm was “ill-informed” in arriving at a certain opinion.
“The legal opinion was sourced incorrectly because we were not interviewed by the lawyers to get both sides,” he said.
“We have written to the acting city manager explaining the legal opinion issue.”
The Herald
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.