Mmegi

P297m smart meter tender in limbo

WUC smart meter PIC: PHATSIMO KAPENG
WUC smart meter PIC: PHATSIMO KAPENG

Water Utilities Corporation (WUC) has been interdicted from making any payments to a local company, Hitong Holdings, which is the winner of the parastatal’s P296,932,615 tender to supply smart meters.

The Corporation started rolling out smart meters in May 2024 year which was expected to cost P1.5 billion. Now part of the tender is affected by legal battles after the WUC outsourced its supply to the manufacturer of the meters, Hitong Holdings. Hitong Holdings is battling with another company, Melco Structure and Civil Engineering over the tender. As a result, WUC has been caught in the middle, creating uncertainty around the tender and its progression. In a recent ruling, Gaborone High Court judge Zein Kebonang confirmed the temporary interdict he issued on December 6, 2024, regarding the disputed tender. The temporary interdict was after Melco Structure accused Hitong Holdings of failing to pay them despite doing work for them which resulted in the latter winning the multi-million pula smart meter tender.

The two companies entered a legal battle after Melco Structure wanted to be paid for the work it provided to Hitong Holdings, the manufacturer of the smart meters and tender holder. According to Melco Structure’s reasons for taking Hitong Holdings and WUC to court, it had a distribution agreement entered into between them. Under the terms of the agreement, it was given an exclusive mandate to advertise, market, and solicit clients and for the sale of Smart Water Metres manufactured by Hitong Holdings. In a ruling issued last Monday, Justice Kebonang explained that he found it sufficient that some injury or harm would result, as the exclusion of the Melco Structure from the awarded tender currently performed by Hitong denies it the right to earn an income from the tender. “This is where the harm or injury is. On the balance of convenience, this relates to prejudice in terms of whether the applicant will suffer more prejudice than the respondent if the interdict is not granted. That balance certainly favours the applicant,” Kebonang said.

He explained that it was clear that Melco Structure doesn't seek to prevent the performance of the tender by Hitong Holdings nor does it seek the latter's business to collapse. Kebonang pointed out that said Melco simply sought to preserve what would essentially be net profits to be shared after the contract consistent with the agreement between the parties in place. Justice Kebonang said that whilst Hitong Holdings contends that it has a healthy balance sheet to meet any future obligations to Melco Structure, it has not disclosed its financials or bank statements to the court in substantiation of that claim. “Other than the contract with WUC, it does not appear to have any other contract nor assets that could be used as collateral or to meet future obligations. Any redress in future is likely to be unmet,” added the judge.

Meanwhile, regarding the loggerhead between the companies following the agreement and all the work Melco Structure did for Hitong Holdings including introducing the smart meters to WUC, the latter ended up winning the P296,932,615 tender (excluding VAT) from WUC. Melco Structure argued that despite all this, Hitong Holdings had not paid them as per their work and took the matter to court seeking orders for the withholding of sums of money due to the latter from the WUC. It further seeks to restrict/interdict the company from disposing of proceeds it is to receive from the services it has provided for third parties as a result of the Melco Structure's efforts. Melco Structure had filed the application arguing that the matter was urgent and sought a temporary interdict against Hitong and WUC.

The company argued that failure for the matter to be heard on urgency would cause irreparable harm to them including that Hitong Holdings was currently undertaking works associated with the tender complained of, and is receiving payments from the WUC. It also stated that Melco Structure was entitled to part of the payments as per its contract with Hitong Holdings, that the latter doesn't account to them for payments it is receiving from WUC. Equally, it argued that Hitong Holdings has no security to satisfy the award of judgment against it in future in the event the applicant succeeds. Melco Structure contended that the amounts it is entitled to run into millions of pula and its action against Hitong Holdings would become academic if the latter is allowed access to all payments due to it from WUC. “It is highly possible that by the time the main action is determined, Hitong Holdings would have received substantial payments under the tender and used it. “Therefore, if the order is not stayed we stand to be prejudiced irreparably,” pleaded Melco Structure in court filings.

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