A joint venture (JV) contractor working on the R400-million tender to build 17 residences at the University of Fort Hare faces a heavy financial loss.
The JV of two companies – the African Student Accommodation Group and Isondlo Investments (Asag/Isondlo) – has been declared in breach of a court order it agreed to in December last year.
It has been ordered to immediately stop construction on several buildings and bulk infrastructure currently underway – and that it not be paid for anything it has done in breach of the court order.
Asag/Isondlo last year agreed to a court order in terms of which the bulk of the tender award was set aside.
It consented to the court order to avert a court challenge by failed bidder, Equicent, which sought to have the entire tender award reviewed and set aside.
Equicent charged that the university had been secretive, irregular, unfair, unlawful and unreasonable on every level in awarding the tender to the JV.
In terms of the court order, the JV could proceed only with phase one of the tender as defined in the request for proposals (RFP) in the tender documentation.
The tender in respect of the remaining three phases was set aside and the university ordered to appoint a panel of three independent consultants to re-adjudicate this part of the tender.
But Equicent in January noticed that the JV was proceeding with work outside the scope of phase one – which consisted of the construction of only two of the 17 buildings.
Equicent director Mazwi Yako pointed out that construction was taking place on five of the 17 buildings as well as on the bulk services to 15 of the 17 buildings.
The JV’s director John Schooling claimed this was in line with phase one as defined in the contract concluded between itself and the university.
In terms of this, phase one was not limited to two buildings but rather defined as 610 beds, Schooling said.
He also claimed it made no sense to limit the building of the bulk services to just two buildings.
But Judge Judith Roberson disagreed.
She said the meaning of the court order was clear and unambiguous.
“The document expressly referred to in the order … was the RFP and not any other document. If the court had intended to refer to a different document or a different definition of phase 1, it would have done so.”
She said it had also been clear the award and contract in respect of phases two, three and four had been set aside.
This had the “necessary consequence that the JV would not be entitled to payment for work done in terms of an award and contract which had been set aside.”
She warned that the university was as much bound and affected by the terms of the court order as the JV was.
This means the JV is unlikely to be paid for any work it completed in breach of the court order.
Roberson also made it clear that the bulk services so far built should also not have exceeded that required by the two buildings.
The student village will consist of 17 residential buildings accommodating 2 046 students, a student centre, a parking area and walkways.
It has been described as the largest infrastructural development project ever undertaken by UFH.
UFH did not oppose the application.
Roberson ordered Asag/Isondlo to pay the legal costs, likely to be substantial given the number of lawyers involved
Financial crisis for builders
The JV of two companies – the African Student Accommodation Group and Isondlo Investments (Asag/Isondlo) – has been declared in breach of a court order it agreed to in December last year.
It has been ordered to immediately stop construction on several buildings and bulk infrastructure currently underway – and that it not be paid for anything it has done in breach of the court order.
Asag/Isondlo last year agreed to a court order in terms of which the bulk of the tender award was set aside.
It consented to the court order to avert a court challenge by failed bidder, Equicent, which sought to have the entire tender award reviewed and set aside.
Equicent charged that the university had been secretive, irregular, unfair, unlawful and unreasonable on every level in awarding the tender to the JV.
In terms of the court order, the JV could proceed only with phase one of the tender as defined in the request for proposals (RFP) in the tender documentation.
The tender in respect of the remaining three phases was set aside and the university ordered to appoint a panel of three independent consultants to re-adjudicate this part of the tender.
But Equicent in January noticed that the JV was proceeding with work outside the scope of phase one – which consisted of the construction of only two of the 17 buildings.
Equicent director Mazwi Yako pointed out that construction was taking place on five of the 17 buildings as well as on the bulk services to 15 of the 17 buildings.
The JV’s director John Schooling claimed this was in line with phase one as defined in the contract concluded between itself and the university.
In terms of this, phase one was not limited to two buildings but rather defined as 610 beds, Schooling said.
He also claimed it made no sense to limit the building of the bulk services to just two buildings.
But Judge Judith Roberson disagreed.
She said the meaning of the court order was clear and unambiguous.
“The document expressly referred to in the order … was the RFP and not any other document. If the court had intended to refer to a different document or a different definition of phase 1, it would have done so.”
She said it had also been clear the award and contract in respect of phases two, three and four had been set aside.
This had the “necessary consequence that the JV would not be entitled to payment for work done in terms of an award and contract which had been set aside.”
She warned that the university was as much bound and affected by the terms of the court order as the JV was.
This means the JV is unlikely to be paid for any work it completed in breach of the court order.
Roberson also made it clear that the bulk services so far built should also not have exceeded that required by the two buildings.
The student village will consist of 17 residential buildings accommodating 2 046 students, a student centre, a parking area and walkways.
It has been described as the largest infrastructural development project ever undertaken by UFH.
UFH did not oppose the application.
Roberson ordered Asag/Isondlo to pay the legal costs, likely to be substantial given the number of lawyers involved
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