Buffalo City Metro (BCM) and a Cape Town-based company, Asla Construction, have smoked the peace pipe, resulting in the metro withdrawing its Constitutional Court action challenging the awarding of a R74m contract to the company in 2014.
The company was appointed by former BCM city manager Andile Fani in May 2014 to build 5,000 housing units in Reeston for Duncan Village shack dwellers, including installing internal civil and electric infrastructure.
The contract was delayed and later halted after the metro brought a review application before the Grahamstown High Court in 2015 to have the contract set aside because Fani had allegedly extended its scope without following due processes.
The legal wrangle continued when Asla took the metro to court demanding payment for work already done.
The high court later declared the contract invalid and ordered that it be set aside after it found Fani had extended Asla’s scope of work to cover Reeston even though the company had only been appointed to build houses in Duncan Village.
However Asla did not take that ruling lying down and successfully appealed to the Supreme Court of Appeal (SCA) in Bloemfontein on March 24 last year, prompting BCM to take its fight one more tier up, to the ConCourt.
After BCM had filed an application for leave to appeal the SCA judgment, the matter was brought before ConCourt chief justice Mogoeng Mogoeng on September 4, with his judgment on the matter reserved and still pending, according to a confidential BCM report presented in council later that month.
However it has now emerged that the metro, after entering into a settlement agreement with the company on November 8, withdrew its ConCourt action and has agreed to bring the company back on site.
According to a confidential memorandum of agreement signed by an Asla representative on November 7 and BCM city manager Andile Sihlahla the following day, the metro also agreed to pay the company R18m plus interest for work already done by the company.
The 23-page agreement, seen by the Dispatch, also reveals that any pending court action between the two parties, will be withdrawn and that agreement was made an order of the ConCourt.
“BCM shall file a notice of withdrawal of its application for leave to appeal under the Constitutional Court case number CCT91/2017 upon conclusion of this agreement.”
The metro also agreed to pay for Asla’s legal costs in the high court, SCA and the ConCourt.
Attempts to get comment from Asla proved fruitless late on Friday, while BCM mayor Xola Pakati promised to get city spokesman Samnkelo Ngwenya to respond to questions around the matter by late Thursday.
However that had not materialised by the time of writing.
Fani was fired in late 2016 for allegedly not following proper processes when he approved the multimillion rand tender.
He was first placed on suspension in August 2016, after the metro’s then-chief financial officer, Vincent Pillay, submitted a report to the then mayor, Alfred Mtsi, stating that the accounting officer might have breached the Municipal Finance Management Act when he appointed Asla Construction.
At the time Pillay said this was done without following proper procurement procedures.
It has been reported that the charges Fani was later found guilty of by an internal disciplinary process, lead to his sacking.
Fani refused to comment on the matter saying on Friday he was not privy to such developments and thus “could not comment about something I have not been made aware of”...