North West’s R200m road headache is still throbbing

2012-08-25 17:19

The price tag for a road between Koster and Lichtenburg in North West is approaching R200 million – and after three years, the road is still not ready for use.

Through taxation, residents of the province have been footing the bill for the rehabilitation of the road for the last three years.

Last week the North West government, represented by its department of public works, roads and transport, reached an out-of-court settlement in terms of which it must pay more than R27 million to construction company Down Touch Investments within 30 days.

Down Touch’s work on the road was suspended on Premier Thandi Modise’s instructions last October after Globul Roads, a losing bidder for the tender, complained that it should have been the winner because its bid was R18 million cheaper.

Modise insisted on reviewing the tender despite the North West High Court in Mahikeng finding no fault against Down Touch.

The provincial government is now effectively paying Down Touch to go.

The company will get R15 million, excluding tax, as compensation for losses incurred when work was suspended. And it will receive just over R11.6 million for invoices which had already been certified for payment.

Other invoices submitted will increase the bill to “way more than R30 million”, two provincial government officials told City Press.

Government undertook in the settlement agreement, which was made an order of the court last week, to pay all outstanding invoices.
In line with its contract, Down Touch has been costing government R217 000 a day throughout the suspension period.

The Koster-Lichtenburg stretch of road connects Gauteng and North West. It is the preferred route for many motorists, who use it to avoid paying R71 at the Swartruggens Plaza tollgate.

Before Down Touch was appointed, the provincial government fired the first contractor, Kaulani Civils, and paid the company R115 million of its R208 million contract.

In terms of last week’s settlement, the government and Down Touch have agreed to stop all pending court cases against one another.

In addition, the public works department also agreed to pay the contractor’s legal costs for six cases, including appeals, that were still under way.

Lesiba Kgwele, Modise’s spokesperson, told City Press that after weighing up its case, government saw no need to continue the legal fight with Down Touch.

“The company did not award itself this tender, so we were going to lose the case in court,” said Kgwele. “When we evaluated the case we decided the people who did these fraudulent things are our own officials and they are the ones who should be punished.”
Kgwele said the disciplinary committee had already held two meetings to start the process.

Four North West public works officials have been on suspension for more than nine months following complaints of tender irregularities against them.

Sandile Mbanjwa, who was the acting head of department, chief financial officer Leeto Dintwe, chief director for roads infrastructure Thembeni Mthembu and supply-chain-management director Samenyana Makgetla have all been suspended on full pay.

Down Touch CEO Johan Cronje said both parties had agreed to “part ways amicably”.

“This court battle would have been a long, protracted one. People who are supposed to use the road would be the unintended victims,” he said.

A public works official with inside information said the settlement was likely to get the department into trouble with the Auditor-General, as it would amount to wasteful expenditure.

“The decision to suspend Down Touch was taken in anger. Government was never going to win this case,” said the official.

Kgwele said the settlement amount would come from the money already budgeted for the road construction. And he said government expects new contractors to start working on the neglected road by the third week of September.

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