THE fraught R631-million contract for Siyenza Group to build toilets for the Amathole district municipality (ADM) has been set aside by the East London high court.
Judge Sytze Alkema has ruled that ADM and Siyenza did not follow prescribed tender procedures, and instead illegally “manoeuvred themselves” into a contract.
He said the municipality and private company could not have entered into the local project on the back of a R119-million contract Siyenza had secured with the Municipal Infrastructure Support Agent (Misa) to build toilets in the Northern Cape.
ADM and Siyena relied on the provisions of Regulation 32 of the state supply chain management regulations to bypass tender requirements.
That regulation allows one organ of state to buy goods or services under a contract put in place by another organ of state after a competitive bidding process, to avoid unnecessary red tape or duplication of costs.
However, Alkema said the service level agreement for the Northern Cape contract could not be used as the basis for ADM contracting with Siyenza in the Eastern Cape, since the terms and prices were completely different.
Section 32 could only be invoked, he said, if the goods, services and contract price were exactly the same.
The law also required a contractual relationship binding the two organs of state, Misa and ADM, and the supplier.
Instead, Siyenza had contracted directly with ADM on the local toilets and simply relied on a notice from Misa that said it did not object to ADM contracting with Siyenza. ADM could have procured toilets in the Eastern Cape under the terms of the contract betwen Siyenza and Misa in the Northern Cape, but Alkema was adamant the approach adopted did not comply with the law.
Siyenza is to pay legal costs.
High court puts final nail in Siyenza coffin
Judge Sytze Alkema has ruled that ADM and Siyenza did not follow prescribed tender procedures, and instead illegally “manoeuvred themselves” into a contract.
He said the municipality and private company could not have entered into the local project on the back of a R119-million contract Siyenza had secured with the Municipal Infrastructure Support Agent (Misa) to build toilets in the Northern Cape.
ADM and Siyena relied on the provisions of Regulation 32 of the state supply chain management regulations to bypass tender requirements.
That regulation allows one organ of state to buy goods or services under a contract put in place by another organ of state after a competitive bidding process, to avoid unnecessary red tape or duplication of costs.
However, Alkema said the service level agreement for the Northern Cape contract could not be used as the basis for ADM contracting with Siyenza in the Eastern Cape, since the terms and prices were completely different.
Section 32 could only be invoked, he said, if the goods, services and contract price were exactly the same.
The law also required a contractual relationship binding the two organs of state, Misa and ADM, and the supplier.
Instead, Siyenza had contracted directly with ADM on the local toilets and simply relied on a notice from Misa that said it did not object to ADM contracting with Siyenza. ADM could have procured toilets in the Eastern Cape under the terms of the contract betwen Siyenza and Misa in the Northern Cape, but Alkema was adamant the approach adopted did not comply with the law.
Siyenza is to pay legal costs.
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