The Cape Chamber of Commerce and Industry is concerned about the impact of the City of Cape Town's decision to cancel its Request for Proposals for the development of the Foreshore Freeway Precinct.
The City announced on Wednesday that it had cancelled this request for proposals "upon receiving legal advice".
The six bidders who have come forward since the request had gone out were notified of the decision in writing on July 13.
Janine Myburgh, president of the Cape Chamber of Commerce and Industry, said in a statement on Wednesday that it appears the City's request for proposals and evaluation of bids fell short of legal requirements.
"Preparing a bid of this nature is an extremely expensive undertaking. The six bidders employed dozens of planners, architects and other top professionals to prepare their submissions and it has all come to nothing," said Myburgh.
"When developers take part in projects like this they understand that there will be no compensation for the losers, but it is a chance they are prepared to take. When the final decision is made they congratulate the winner and move on."
Myburgh said what the bidders do not expect is that all their proposals will be thrown out because the City "got it wrong and the whole process was in some way illegal".
For her this raises two questions. The first is whether there will be some form of compensation for all the bidders. The second is who made the mistakes, and will there be consequences?
"Senior City officials earn massive salaries and business and ratepayers have every right to expect solid professional work from them," said Myburgh.
"The mistakes, whatever they were, have also cost the local economy an investment of a billion rand or more and how many thousands of direct and indirect jobs?"
For Myburgh it is important to ask what will be the long-term consequences of "this expensive disaster"?
"Will good developers and professional firms become reluctant to tender for future City projects? And what of the reputational damage to the City?" she asked.
According to the City, the Stage 1 bid evaluation process was concluded in February 2018. Several appeals and objections were lodged that contested the application of the evaluation criteria as set out in the Request for Proposals documentation.
Having received legal advice, the City concluded that a lack of sufficient clarity in the RFP documentation rendered the evaluation criteria vague.
"Procurement processes must be compliant with the rule of law, in particular with section 217 of the Constitution, which governs public procurement. There must be no doubt about the integrity of these processes and, as such, I have decided to cancel the RFP," Lungelo Mbandazayo, the City Manager, said in a statement.
"Furthermore, the economic outlook for the country has become significantly weaker since the issuing of the RFP two years ago. This change, together with the additional burdens that the City, its ratepayers, and residents are currently facing, cannot be ignored."
Mbandazayo said the City is reconsidering the future of this project and will communicate further once a decision has been made.
When Fin24 approached the City for its reaction to the views of the Cape Chamber, the City referred to the earlier statement.
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