Department welcomes decision in road maintenance contracts dispute

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28-07-2023
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South African Government News Agency
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The Gauteng Department of Roads and Transport has welcomed the ruling in a case involving a dispute between several contractors and the department’s Routine Road Maintenance (RRM).

The adjudicator in the matter dismissed the case of the claimants (the contractors) in respect of the RRM’s alleged breach of contract between the department and the contractors.

The decision was handed down by Advocate FJ Nalane-SC as the adjudicator.

Contractual disputes arose out of claims by 69 claimants, lodged in 2008 by Babazani Trading and Projects CC and 24 others, for alleged breach of contract.

The claimants were awarded contracts to perform routine road maintenance in Gauteng. Claimants were seeking payment for damages with interest collectively amounting to approximately R400 million.

These were contracted projects executed under the auspices of the Roads Infrastructure Strategic Framework for South Africa (RISFSA) routine road maintenance contracts. They are tendered contracts and winners are bound to facilitate active participation by small and emerging contractors.

Roads and Transport MEC Kedibone Diale-Tlabela welcomed the judgment in this matter.

“The department is pleased this judgment not only removes the uncertainty created by this legal challenge. The judgment further enables the department to focus its energies on pursuing its mandate of delivering a world-class road infrastructure that facilitates economic participation and growth, inclusivity as well as improve the lives of people in Gauteng,” the MEC said on Thursday.

The claimants had referred the matter for adjudication against the department, the Accounting Officer (HoD) and the MEC. 

In lodging the claim, the claimants relied on material terms and conditions, which included that:

• Each would perform routine road maintenance in various areas and routes allocated to them within the province.
• Commencement date of the contract was set for 1 December 2008.
• The duration of the contract was for a period of two years.
• The agreed contract price was fixed and to be paid monthly to claimants by the department.
• They further claimed the department was in breach in that it failed to, amongst others, issue work orders they were entitled to, pay certain invoices, plus interest and pay escalation costs.
• The adjudicator dismissed the claims on procedural grounds and these were:
• Some claimants did not refer their claims either timeously or at all.
• The adjudicator did not have powers to adjudicate disputes as some claimants referred their claims for adjudication to Mogotsi (not an appointed adjudicator), who decided and issued awards.
• Some of the claimants never referred their claims to the appointed adjudicator at all and are time barred.
• Some claimants never referred claims to the appointed adjudicator and instead approached the Office of the Public Protector. The contract, NEC3 (New Engineering Term Service Contract), explicitly prescribed that “in the event of a dispute, this would be initially referred to the adjudicator for adjudication”. This group is also accordingly time barred.