Court cancels R37.5 million water contract
By the AFREEQUE newsroom, based on IOL
South Africa’s Supreme Court of Appeal cancels the appointment of Magalies Water to manage water and sanitation in a municipality in the North West, a three-year contract worth R37.5 million. The ruling penalises the absence of a valid contract and authorised funding, according to IOL.
The Kgetlengrivier Local Municipality, in South Africa’s North West province, was unable to produce a valid contract, the complete record of its decision or proof that the R37.5 million earmarked for three years had been authorised and funded. The Supreme Court of Appeal therefore set aside the decision to entrust Magalies Water with managing water and sanitation services, as well as the operator’s acceptance of the assignment, IOL reports.
The dispute dates back to 2020, when untreated sewage from the Koster and Swartruggens treatment plants flowed into the Koster and Elands rivers, which supply drinking water to the population. Kgetlengrivier Concerned Citizens, an association representing residents of the municipality, repeatedly approached the courts to obtain an end to the discharges and the restoration of services, according to IOL.
An interim order issued on 18 December 2020 ordered the municipality to stop the discharges and resolve the problems behind the crisis. On 7 January 2021, the association took control of the water and sanitation facilities, before a consent order issued five days later required the municipality to appoint an appropriate implementing agent by the end of January. Magalies Water was appointed the same day, even though its previous contract with the municipality had been terminated on 26 November 2020 for poor performance, IOL reports.
The municipality subsequently submitted a letter of appointment dated 12 January 2021 and an operations and maintenance agreement dated 27 May 2020. The Supreme Court of Appeal found that the latter concerned the previous contract, which had already been terminated, and therefore could not serve as the basis for the new appointment, according to IOL.
