The construction of a 10km tar road in Molelema and Matsheng villages, North West, has been halted for more than a year now as the government disputes that it should fork out R114 million for the project.
Transport Minister Fikile Mbalula has revealed that the project to tar the gravel road will remain on hold until a court delivers its ruling.
Replying to written parliamentary questions, Mbalula said the government sought to appeal an adjudication outcome that found it liable to pay R114m to Botong Nkolele Joint Venture, contracted in 2019 for the project.
The joint venture was awarded the contract to construct the road for R65m. This amount was based on its bid, which was the lowest of 24 bidding construction groups.
Of the 24 tendering groups, 20 placed their bids well over R100m. The highest bid was R190.5m, while the second highest was R168.6m.
Botong Nkolele was due to start the construction on February 17, 2020 and complete it by January 2021. But just 58% of the project was done.
Detailing the background of the dispute, Mbalula said: “Prior to the awarding of the tender, the contractor confirmed in writing that it would be able to complete the work within the tendered scope, price and time frame.
“Immediately after commencement of the project, the contractor demanded an additional amount of R49m.
“This would have increased the project value from R 65 018m to R114m with a variance of R49m, which constitutes an increment of 77%.
“Acceptance of this deviation could be classified as an irregular expenditure.
“To this end, the department could not agree to the deviation, hence the contract was terminated as per the provision of the contract,” said Mbalula.
Botong Nkolele took the dispute to adjudication and won.
The joint venture’s argument before the adjudicator was that the North West Department of Public Works and Roads, which awarded the contract, knew that there were arithmetic errors in its bill.
It submitted that the arithmetical errors in the bill of quantities should have been addressed prior to the conclusion of the agreement. The department’s actions were tantamount to shifting costs to the joint venture, it argued.
Adjudicator advocate EP van der Hoven found in the joint venture’s argument. A second adjudicator, Leon Lamprecht, concurred with the ruling.
“The defendant is directed to make provision for the arithmetical errors in the amount of R24 589 765.99 inclusive of VAT,” Van der Hoven wrote in the outcome delivered six months ago.
Mbalula said the government had taken to court to seek an order setting aside the adjudication outcome.
“The department is not in agreement with the outcome of the Adjudication Board after one the board members resigned, citing procedural matters,” he said.
“The department has now filed papers in court opposing the outcome of the Adjudication Board.
“For that reason, the project cannot proceed pending the outcome of the court process.”
Daddy Tong, director of Botong Nkolele JV, told The Star yesterday that the department had no grounds to not implement the adjudication outcome.
“The department is refusing to respect our contract,” Tong said. “We have won at adjudication, a process which they were part of. They are now refusing to adhere to the adjudication outcome.”
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