Esorfranki keeps disputed R864m tender
Johannesburg - Construction firm Esorfranki [JSE:ESR] has
remained the winning bidder of the second phase of the western aqueduct project
commissioned by eThekwini Water and Sanitation, the utility said on Monday.
It won the R864m tender as part of a joint venture with
Cycad Pipelines but the project was delayed after complaints by losing bidders.
The start of the contract for the construction of the second
phase of the western aqueduct project between Inchanga station and Ntuzuma was
delayed by as much as 12 months, after three unsuccessful bidders lodged appeals
and objections against the awarding of the contract to Esorfranki and
Cycad Pipelines by eThekwini Council.
Civil engineering and construction group Sanyati Holdings [JSE:SAN] said in January that its bid was the lowest at R699.4m. The group said
that Wilson Bayly Holmes - Ovcon [JSE:WBO] had been about 2.8% higher at R720.1m.
The matter was assessed by the City Council. All
arrangements for the construction of the project were halted in June 2010,
pending the resolution of the disputes as well as a subsequent court
application brought against the municipality by one of the unsuccessful
Andrew Copley, eThekwini Municipality's project manager for
the western aqueduct project, welcomed the end to the protracted delays.
The project would significantly strengthen the capacity of
bulk water supply to the western and northern regions of eThekwini by injecting
325 megalitres daily, with the capacity to potentially peak up to 470
megalitres a day. The city's current water consumption stands at 950 megalitres
In addition, excess pressure in the pipeline was planned to
be converted into hydropower at two sites along the route of the pipeline - one
at Hillcrest and the other at Wyebank - allowing the municipality to use this green energy to supply the electricity requirements of these
Copley said several criteria had to be fulfilled before any
tender was awarded. These included compliance with the conditions, black
economic empowerment participation, price and quality.
"Because of the sheer size of the construction
activities that need to be undertaken for the installation of these pipelines,
and the fact that the route of the project passes through important urban
(residential and commercial) areas, the construction of this project demands
the appointment of a fully experienced and well-resourced contractor," he
Some details on why the appeals were unsuccessful would be nice. Were the bids unreasonably low or were they disqualified because they did not comply? These issues are critical in the construction industry and in public procurement in general.
Further to above - were the lower bidders not technically capable?
"..the construction of this project demands the appointment of a fully experienced and well-resourced contractor.."