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Cape Town - One of the subcontractors involved in the MyCiTi contract with Lumen Technologies has come out strongly in defence of the City of Cape Town, saying the company’s accusations of misconduct by city transport bosses are a “bluff” to cover up its financial woes.
Shaun Patterson, Questek’s chief operating officer, said the city had a cast-iron case against Lumen.
“Lumen are barking up the wrong tree,” Patterson said. “They were not terminated for failing to deliver technically, but financially.”
Questek said Lumen, the company appointed to handle the operation and maintenance of the MyCiTi bus service plans, owed it more than R10 million for work done on the MyCiTi contract.
Patterson said Lumen had been unable to renew the R5m performance bond required by the city when the project ran late, and was therefore in breach of contract.
The city had “no option” but to terminate Lumen’s contract, as this was a non-negotiable contractual condition.
But Sedicka Chilwan of Lumen said the company was being advised by “seasoned advocates”.
“We are comfortable that we have a strong case against the city.”
Chilwan said Lumen’s 15-page complaint had not been put to the council and the company was considering getting a court order to put the full document before the council.
She said the company would press on with its legal action against the city for cancelling its R234m contract in March.
It would also claim R50m compensation.
But the Western Cape High Court has ordered that Lumen pay Questek its outstanding money and all associated legal costs.
The court order is expected to be made final next Friday. It could effectively liquidate the company.
Meanwhile, Lumen has rejected the city’s termination of its contract.
In its official complaint to the city manager, the company accused Melissa Whitehead, head of transport for Cape Town, of making defamatory comments about the company in the media, of failing to acknowledge whistleblowing, and of misrepresenting the facts about its subcontractors.
But Patterson said Lumen had failed to pay its subcontractors and that was the reason the companies stopped work and the project could not be completed.
Ian Neilson, mayoral committee member for finance, confirmed in a letter to the Cape Argus that Lumen’s inability to extend or replace its performance security guarantee was one of the reasons for the contract’s termination.
“This decision has not been taken in haste,” Neilson said.
“Extensive support was given to them to enable them to meet their contractual requirements. But in the end, the best interest of the ratepayers and commuters required that the city cancel the contract.”
The report considered by the council last week noted that during the initial 16 months of Lumen’s contract, various claims were lodged for extensions and additional funding.
Status reports revealed that Lumen was not performing, or was underperforming on some of the milestones that had been set by the city.
The city issued a breach notice last December, giving the contractor until January to remedy the problem.
The deadline was extended again to allow Lumen more time to comply, but by February it could still not resolve its issues.
“As the contractor had failed to fulfil its contractual obligations, the commissioner recommended that the contract be terminated.”
Furthermore, mediation to resolve the dispute was “to date unsuccessful”, the city manager’s office said.