The Grahamstown High Court has ordered the Amatola Water Board to pay a joint venture a final amount of R1.5m out of a R46m contract to upgrade the Mthatha sewage works.
Amatola Water (AW) forked out R45m in 14 payments between May 2016 and October last year as its appointed overseeing agent engineer signed off on the phased completed work on the upgrade of the Ngangelizwe outfall and associate gravity sewers in Mthatha.
But, the board suddenly pulled the plug on paying a final amount of R1.5m.
The two companies – Liviero Civils in East London and Rough Seas Trading 15 in Mthatha – then turned to court.
But, in a bizarre twist, Amatola’s recently appointed CEO Vuyo Zitumane said in court papers the tender had never been awarded to the joint venture and the board had never even heard of one of the people who purported to sign the subsequent agreement on their behalf.
She said the three bids for the tender were all rejected by the technical bid evaluation committee and therefore none had reached the bid adjudication committee stage.
Oddly, the purported award date of January 20 2016, was impossible as the tender’s closing date was only January 29.
A person named Zimbile Mqadi, who concluded the subsequent agreement on behalf of the board, was not known to them and had never worked there. She said “several internal probes into irregular procurement processes, including fraud and corruption, and disciplinary proceedings had been instituted” with some officials suspended or dismissed.
Judge Jeremy Pickering said Zitumane had failed to explain why the subsequent agreement between the joint venture and the board had also been signed by the ex-CEO. Although Pickering did not say who this was, Lefadi Makibinyane was the board’s CEO at the time the agreement was signed. He was dismissed in September last year following a disciplinary process. Zitumane was later appointed to turn the floundering water utility around.
Pickering said Makibinyane’s signature gave rise to what “on the face of it” was a valid agreement. The board had also not disputed that the joint venture had actually provided the contract for services over an extended period and that the board had paid out, without any protest, R45m. Zitumane had in no way shown that the joint venture was implicated in any of the alleged fraud.
Pickering said the board had failed to produce an adequate defence...