The government has gotten its P1.5 billion tender back from the Chinese-owned construction company, China Jiangsu and its second preferred construction company Zhengtai has been given the go ahead to continue with the works.
Following the latest development, the Court of Appeal (CoA) on Tuesday ruled that the State was right in its power to rescind the tender from Jiangsu as per the warning of the Directorate of Intelligence Service (DIS) that the Chinese company was a security threat.
Earlier this year, the government lost the tender to Jiangsu through a court order after the duo had engaged in messy back-to-back court battles with Zhengtai, which was awarded the tender, ordered to stop the works.
The company that has been having a messy battle with government over the cancelled tender amidst allegations of security threat was given the tender back when the High Court rubbished the DIS warnings and ordered Ministry of Land Management, Water and Sanitation Services and Public Procurement and Disposal Board (PPADB) to issue the tender back.
According to the CoA judgement, generally the award of a tender to a contractor who had formally entered into a contract with the procuring entity would not be set-aside in circumstances where the aggrieved party would be entitled to claim damages. Justice Monametsi Gaongalelwe said according to the State’s affidavit, it indicated that another construction company, Zhengtai had already started doing works on the project and that it had also incurred costs borne out of expenditure on the project.
“It is common cause that Zhengtai was in no way to blame for the DIS letter. Where a contractor who was ultimately awarded a tender is innocent in the sense that no blame is attributable to it for the reviewable irregularity such constitutes a paramount consideration in its favour,” he said. He explained that a Court was empowered and has discretion to confirm an award of a tender even in cases where the original award was an invalid administrative act. Gaongalelwe also said stopping works of a contractor was capable of
“The project in question involves provision of water, an essential commodity in a wide area which has suffered inconvenience for some time. The company had commenced the works in October 2019 though it was later interrupted by court orders. As a direct result of such interruptions have stalled resulting in immense prejudice to the community,” he said. He explained that one of the paramount factors was to impart justice to the warring litigants and to the community, magnitude of the project and the welfare of the community at large which brings the question of public interest into play. Meanwhile the whole saga between the parties stated when the ministry was advised to terminate all deals with the company due to security reasons after it was awarded the tender to do works in Maun that included the design, supply and build of water reticulation.
The background of the case was that the clash between government and the Chinese company was reported to be bigger than just the cancelled tender and reports suggested that the state was advised by DIS to cease all dealings with it. According to a confidential letter dated April 2, 2019 from the DIS addressed to the Permanent Secretary of Ministry of Land Management, Water and Sanitation Services the ministry was advised to terminate all deals with the company due to security reasons.
The company then launched an urgent application on March 27, 2019 before court seeking an interdiction for re-awarding of the tender to their rival company Zhengtai Group Botswana. They wanted the PPADB’s decision to re-award the tender to their rival set aside pending a review proceedings they have instituted against the ministry, PPADB and the Attorney General for the withdrawal of the tender.