EXCLUSIVE: Desalination company to take City of Cape Town to court for breach of contract

2019-06-13 22:19
Quality Filtration Systems (QFS) used to run this desalination plant in the Waterfront. (Kristine Liao, GroundUp)

Quality Filtration Systems (QFS) used to run this desalination plant in the Waterfront. (Kristine Liao, GroundUp)

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The company running a desalination plant situated at the V&A Waterfront has started legal proceedings against the City of Cape Town, following months of negotiations over contractual disputes.

Quality Filtration Systems (QFS) lodged papers at the Western Cape High Court on Thursday morning. 

It is suing the City for breach of contract valued at R53m, plus damages. 

The company claims the City owes it millions in outstanding payments and that it had incurred huge extra costs to clean the seawater after discovering high levels of pollution.

Read more here: Desalination plant ends contract with City of Cape Town

According to Musa Ndlovu, QFS director, the seawater quality was up to 400% worse than the City's tender specifications had indicated. The company added that the City was aware of the high levels of contamination but did not divulge its extent. 

Scientists say they warned the City about the pollution caused by the Green Point sewage outfall pipe.

Leslie Petrik, a chemistry professor at UWC, are among those who highlighted the problem and was a co-author of a 2017 report that concluded: "Apart from the high microbial load being discharged into the ocean daily, the complexity and toxicity of chemicals that are being disposed into the City's sewage are imposing a growing chemical pollution risk to the nearshore coastal environment, and thus to the desalination plant's intake water." 

QFS says despite attempts to resolve the disputes through mediation, there has been no settlement or result since the process concluded on March 22, 2019.

Also read: Cape Town council's desalination debacle: Seawater 400% more polluted than City of Cape Town's tender data indicated

Ndlovu said the City had left them with no option but to take the matter to court and sue for breach of contract for non-payment of rental, and for the extra costs incurred caused by the pollution. 

The City previously said it rejected any implication that false information had been supplied to anyone "deliberately".

Councillor Xanthea Limberg, mayoral committee member for water and waste, maintained that QFS was responsible for "taking cognisance of normal variations in water quality" and for building a plant "robust enough to accommodate raw water quality during all seasonal variations".

In a statement issued by the City in May following the QFS decision to terminate its contract and pursue legal action, Limberg said the City was disappointed with the company's "unilateral decision".

"Given this latest development, we consider it opportune to state our version of events, notwithstanding the City's reluctance to debate contractual matters in the media.

"The City would like to state upfront that QFS has been paid to date for the actual amounts of drinking water delivered to the City since May 2018.

"It should be noted that in terms of the contract, the City does not own the plant and equipment. QFS was responsible for the cost of establishing the plant, which cost would have been recovered by QFS through the sale of water to the City," she said.

She said QFS was awarded the tender on January 8, 2018 to establish a small, temporary desalination plant at the V&A Waterfront to be operated, by a suitably experienced water treatment specialist team, for a period of two years.

"A requirement of the specification was that the plant would be able to cope with varying sea water quality conditions likely to be encountered at a selected site at the V&A Waterfront close to the harbour entrance.

"The contract was awarded to QFS to produce and deliver 2 million litres of potable water per day in accordance with the South African National Drinking Water Quality Standards."

She said during May 2018, the plant started delivering water to the City, but between May 2018 and January 2019, QFS were unable to fully comply with their obligations in terms of their contract.

"This led to various contractual disputes with the supplier, which culminated in the institution of a mediation process in January 2019."

Limberg said it was now public knowledge that the confidential mediation process had failed to resolve the various disputes.

"The City made every attempt to find a workable resolution with QFS and during the mediation process placed a number of proposals on the table. Each of these were rejected. The City has done everything possible to protect the service provider's interest while staying within our mandate to meet the requirements of the Municipal Finance Management Act."

The plant has been dormant since January 2019 and QFS says it will stay closed until further notice. 

The City has 10 days to respond.

Read more on:    cape town  |  drought  |  pollution  |  water

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