Provincial Street Lighting Contract set aside by Court
RACEC Electrification has succeeded in having an R80 million provincial governement tender for street lighting, granted incorrectly to a rival bidder, reviewed and set aside. Western Cape High Court Acting Judge Stephen Koen directed the province’s Executive Council for Transport and Public Works to reconsider a tender it had amended, allowing Adenco Construction to win. The tender was issued in August 2008 for the supply and installation of street lighting on the truck road between the Koeberg and Old Oak interchanges in Cape Town.
The award of such tenders is governed by the Construction Industry Development Board (CIDB) Act and its regulations. A national register categories contractors in terms of their grading for financial capability and the type of work they do and the scope of the contracts for which they may tender. RACEC had a grading of eight and was qualified to undertake work of R30m to R100m. Adenco had a grading of six and could do work valued between R5m and R10m. The tender was worth R84.2m.
According to an amendment to the CIDB regulations, an organ of state may award a tender to a bidder outside the prescribed value range if the margin which it exceeds this is “reasonable”. Adenco exceeded its limits by 640 percent or R54m. According to CIDB guidelines, a margin of no more than 20% was reasonable.
Judge Koen said the tender decision had to be set aside and referred the matter back to the province for reconsideration. Adenco must pay the costs and two counsel.
Cape Times May 11, 2009
