City of Cape Town loses tender battle

The City of Cape Town has lost a battle at the Constitutional Court with an engineering company which it claimed had an unfair advantage securing a tender to decommission Athlone Power Station.

The tender was awarded to a joint venture between Aurecon and ODA Consulting. The city claimed that it erred in awarding the tender with some council members complaining that the process was tainted by corruption and irregularities. Aurecon was alleged to have had an unfair advantage because they were privy to internal email communication regarding the tender.

Due to the concerns raised‚ Cape Town Mayor Patricia De Lille gave instructions to Ernst and Young auditors to investigate.

After instigating a civil case in the Western Cape High Court‚ Aurecon launched a counter application in which they sought a declaratory order that would not prevent them from bidding for the tender.

The High Court ruled in favour of the City saying that Aurecon should have been precluded from tendering for the contract due to its involvement in the preparation of the draft scope of work and that the inclusion of Aurecon’s tender rendered the procurement process unfair. Aurecon’s counter application was dismissed.

Not satisfied with the ruling‚ Aurecon took the matter to the Supreme Court of Appeal which has now found that there were no irregularities and that the city was 352 days late in launching its application to bar Aurecon from the tender. The correct time frame was 180 days to appeal after a tender has been awarded.