Contractors agree to pay ‘any amount ordered against them’ after Beitbridge fiasco

Contractors responsible for the porous fence at the Beitbridge border have seemingly succumbed to the pressure of the Special Investigating Unit (SIU) agreeing to pay any amount ordered against them by the Special Tribunal or a court.

On Friday, the SIU’s bid to freeze the bank accounts of Caledon River Properties CC trading as Magwa Construction and Profteam CC was withdrawn.

The companies were responsible for the construction of the border fence which R40 million had been budgeted for.

Judge Lebogang Modiba granted the withdrawal of the case as part of an agreement between parties not to proceed with Part A of the case and deal with Part B directly.

Part B dealt with the merit of the case, while part A only dealt with the freezing of the contractors’ accounts.

SIU spokesperson Kaizer Kganyago said all parties agreed that the Department of Public Works and Infrastructure (DPWI) shall institute proceedings, by issuing and serving same, against Magwa Construction and Profteam CC within 20 days of Friday’s order.

The two companies, “without admission of any wrongdoing”, also undertook to pay any amount ordered against them by the Special Tribunal or a court.

“Pending the institution of the proceedings envisaged, Magwa Construction and Profteam CC [the first and second respondents respectively] shall not make any claims and the DPWI shall not pay any amounts emanating from the general conditions of contract, second edition (GCC 2010). Failing the institution of the aforesaid action, Magwa Construction and Profteam CC may immediately proceed to enforce their rights under the GCC),” Kganyago said.

Kganyango said the agreement pleased the SIU that the subsequent judgment would be satisfied.

He continued: “The undertaking by the respondents that they will pay any amount ordered against them by the tribunal, gives us comfort that the subsequent judgment will be satisfied. The order further ensures that the DPWI will not pay any further amounts claimed by the service provider against the balance of the contract pending the institution of proceedings. The SIU will ensure that everything is done to protect the resources of the state from any misuse. In this case we have successfully stopped the payment by the DPWI to the value of approximately R18 million before it was paid to the contractors.”

Parties also agreed that Part B of the case should be enrolled speedily in the Special Tribunal.

The DPWI’S national bid adjudication committee (NBAC) approved both bids for the project in March.

Beitbridge border fence graphic, by Costa Makola.

On 18 March, the NBAC approved the appointment of Magwa Construction, to provide contractor services at a cost of R37 million.

The next day, Profteam CC’s appointment was approved to provide professional services at a cost of R3.2 million.

The project was meant to secure the country’s border with Zimbabwe in the wake of the Covid-19 pandemic. It had a budget of R40 million and, so far, R21.8 million had been paid to contractors.

The SIU’s initial application was to freeze the bank accounts of the two companies to recoup the R21.8 million.

An investigation into the Beitbridge border fence project found that the government paid R17 million more than the market-related cost.

In August, investigators detected at least 115 breaches that made it easy for illegal immigrants to unlawfully enter South Africa from Zimbabwe.

Kganyago said the SIU sought to set aside the contract between the DPWI and the contractors to recover any money that might have been lost by the DPWI.

The costs of the application were reserved for determination “by the forum determining the action”.

For more news your way, download The Citizen’s app for iOS and Android.