Infrastructure
With regard to the infrastructure work at the Sir Lowry’s Pass High School:
- What (a) is the total value of the contract for the infrastructure development work at the school, (b) is the latest update on the progress that has been made to date, (c) were the reasons for the (i) suspension of work and (ii) subsequent termination of the contract, (d) were the details of the process followed for these actions and (e) are the total costs incurred by a certain company, whose name has been furnished to his Department for the purpose of his reply, in relation to this project up to date;
- whether his Department is prepared to reimburse the costs incurred by the company, including the R7 million construction guarantee; if not, why not; if so, what are the relevant details;
- (a) how much has this Department spent on litigation related to this dispute, (b) what were the outcomes of the court case, (c) what is the current status of the out-of-court settlement and (d)(i) what are the reasons for the delays in registering an adjudicator and (ii) how are these delays being addressed?
- (a) The total value of the original contract for the infrastructure (including approved Compensation Events) is R62,366,883.16.
- The contract with the original contractor was terminated after approximately 25% of the work was completed, despite 60% of the contract period having elapsed. On 22 August 2024, the updated FIDPM Stage 4 documentation for the completion contract was submitted to the WCED for review and approval. Following this approval, the Department of Infrastructure (DoI) will proceed with the procurement process to appoint a new completion contractor. In the interim, a Make-Safe Contractor was appointed to ensure the site is safe in terms of OHS compliance and a fencing Contractor installed perimeter and temporary fencing to secure the site.
(c) (i) The works were not suspended by the DoI as the contract was terminated in line with the conditions outlined in the contract. (ii) The contract was terminated as a result of 2 major issues: failure to provide and maintain a construction programme; and failure to attend to identified defects on the defects register. Both these two reasons are contractual reasons for termination: NEC4 Clause 91.2: The Employer may terminate if the Project Manager has notified that the Contractor has not put one of the following defaults right within four weeks of the date when the Project Manager notified the Contractor of the default. Substantially failed to comply with its obligations (R11).
- Multiple workshops and meetings were held with the Contractor to assist with the programming. It was also agreed that extra payment certificates could be issued to improve the cashflow of the Contractor. Notification of Defaults was issued for every item not receiving the attention from the Contractor as stipulated in the contract. Each default has a four-week correction period prior to its being deemed a reason for termination. These correction periods lapsed without any change. After four weeks the Contractor was informed that DoI has the right to terminate should they so choose. No response was received from the Contractor and two months after this notice the DoI terminated on 7 July 2023 in line with the conditions of contract.
- The total amount certified to the Contractor at termination is R13,714,540.17. A draft Final Account was presented to the Contractor (which indicates money owed to the Contractor), but the Contractor is disputing the draft Final Account and this forms the basis of the current dispute referred to Adjudication.
- 91% of the amount certified for the Contractor has already been paid. The DoI is not in a position to release the guarantee due to additional cost incurred by the Department as a result of the failure of the Contractor to perform the required services.
- (a) The total to date is R123,165.00
- Before any High Court hearing could take place the Senior Counsel for the
Contractor indicated that the matter would be withdrawn and that the Contractor would no longer request to be reinstated to the site. It was agreed to settle the dispute pertaining to the Final Account outside of the court through adjudication.
When the DoI informed the Contractor that it would not release the Performance Guarantee, the Contractor approached the High Court again but this was dismissed without a costs award.
The Contractor also approached the High Court in an attempt to interdict the Performance Guarantor from paying the DoI the value of the guarantee. This too was scrapped from the roll for lack of urgency and costs were awarded against the Contractor.
(c) Parties are preparing for Adjudication.
(d) (i) The Adjudicator is required to be registered on the CSD platform.
(d) (ii) The Adjudicator requested assistance to register on the CSD platform and the DoI SCM is in direct contact with the Adjudicator to resolve the matter.
