Consulting Engineering Company Files Court Papers Challenging Lepelle Northern Water’s ‘Unlawful’ Tender Advert

HENDRICK TSHWEU|November 30, 2024

FINGERED: Lepelle Northern Water CEO Dr Cornelius Ruiters has “irregularly” terminated Isiphethu Engineering’s contract allegedly at the behest of the entity’s Board Chairperson, Dr Nndweleni Mphephu and the contractor over a payment dispute. (Photo: Lepelle Northern Water’s X Account).

The legal dispute between consulting company Isiphethu Engineers and water utility Lepelle Northern Water (LNW) has taken another turn.

The engineering company has filed court papers challenging LNW’s decision to advertise the multi-million rand contract for consulting engineering services for the R4 billion Giyani Bulk Water Project, saying the move is unlawful.

Earlier this month, LNW advertised in the government’s tender bulletin a tender for “Professional Service Provider for Giyani Water Serviced Projet (rm08), with December 3 as the closing date.

The decision was widely seen as preempting the outcome of an arbitration process between the two parties ordered by the Limpopo High Court in October.

On October 24, Judge Naude Odendaal of the Polokwane High Court ordered the LNW Board and CEO, Dr Cornelius Ruiters, to “confirm the appointment of an arbitrator in the dispute and to confirm such appointment in writing within 3 (three) days of the grant of this order”.

PROGRESS: After a decade-long delay attributed to poor performance and alleged tender irregularities, significant progress appears to have been made in the R4.1 billion Giyani Bulk Water Project. Pipes have been connected, and leaking reservoirs have been repaired.

In July, African Times reported that the Limpopo water utility irregularly terminated Isiphethu’s contract for the Giyani Water Project, allegedly at the behest of board chairperson Dr Nndweleni Mphephu and the contractor, over a payment dispute.

Isiphethu’s Head of Engineering, Kensington Muchawonweyi, says LNW’s decision to advertise the tender is unlawful because their contract remains valid since the arbitration process ordered by the court has yet to be conducted.

“We did notice the advert on the KNW e-tender portal. We are of the view that the advertisement is unlawful, and we have challenged it through our lawyers. LNW has undertaken to withdraw the advertisement through their lawyers’ letter dated 15 November 2024,” Muchawonweyi said.

He added that the arbitration process was about the termination of Isiphethu’s contract by Ruiters on July 30.

“The arbitration is not about a payment dispute but about the unlawfulness of the alleged termination of the agreement through their letter of 30 July 2024. Isiphethu has filed its papers, and it is awaiting the papers from LNW. Isiphethu will follow through with the arbitration,” Muchawonweyi maintained.

ACCUSED: Lepelle Northern Water Board Chairperson, Dr Nndweleni Mphephu, allegedly instructed CEO Dr Cornelius Ruiters to terminate Isiphethu Engineering’s contract following the consulting company’s payment dispute with a Giyani Project contractor. ***(Photo: Lepelle Northern Water’s X Account)***

In a termination letter addressed to Isiphethu and seen by African Times, Dr Ruiters claimed the consulting engineering company’s contract had lapsed four years ago. However, official documents, including internal memos, revealed that Dr Ruiters had signed at least four contract extension letters given to the company since 2021.

LNW further said in its termination letter that it would withhold payment to Isiphethu and “recover any losses through professional indemnity.” After the fallout, LNW appointed a mediator to resolve the payment dispute but excluded Isiphethu from the process. In response, Isiphethu filed an urgent application with the Polokwane High Court to confirm the arbitrator’s appointment.

Complying with the order, LNW, through its legal representatives Modise Mabule Inc., informed Isiphethu via the law firm’s legal representatives, Molepo Inc. Attorneys, on October 28 that Ms. Dlamini had been appointed arbitrator.

“In compliance and implementation of the court order of 24 October 2024, the First and Second Respondents hereby appoints Ms. Dlamini as an arbitrator in this matter from the list of Arbitrators provided by the Arbitration Association of South Africa.” the letter stated.

Despite this, on November 12, African Times was reliably told by LNW insiders that the water utility had advertised the same tender before resolving the dispute with Isiphethu Engineers. This development raised concerns that LNW might be preempting the outcome of the arbitration process.

***DEMANDING WATER: Giyani residents receive a progress report from former Water and Sanitation Minister Senzo Mchunu about the Giyani Bulk Water Project in Limpopo in April 2024. (Photo: DWS)***

On November 14, African Times contacted LNW’s spokesperson, Joe Makhafola, seeking comment on the status of the contract and arbitration efforts. However, no response has been received to date.

However, the following day (November 15), LNW sent a letter to Molepo Inc., Isiphethu’s lawyers, committing to pay the engineering company’s outstanding amount. Through its legal representatives, Modise Mabule Inc., LNW said it would settle the outstanding amount and withdraw the advertisement for the tender until the matter was resolved.

“We act on behalf of Lepelle Northern Water who is our client herein. Please be advised that after consultation with our client and our discussion yesterday, our client has agreed to settle the invoice due to your client.” the letter stated.

“Please take further notice that our client has agreed to withdraw the advertisement of TENDER NO: LNW10/24/24- PROFESSIONAL SERVICE PROVIDER FOR GIYANI WATER PROJECT- (RM08) until the matter is finalised.”

However, the advert still appears on the government’s e-portal tender bulletin.