High court halts Port Alfred desalination plant project after corruption allegations

Despite a critical need for water in Port Alfred and its surrounding towns, the Makhanda High Court has stopped the Ndlambe municipality from awarding a contract for the construction and operation of a desalination plant, with the judge saying there were grave concerns about the way in which the contract was granted.

According to papers before court, the losing contractor, MEB Energy, received information that a bribe had been solicited in exchange for the multi-million rand project.

Judge Judith Roberson said given the need for water by residents in the area, she will order that the matter be heard as soon as possible, but she said there were real concerns that public funds will be wasted and quality work will not be done by the company that was awarded the bid.

According to the water shedding schedule implemented by the Ndlambe Municipality, residents have running water only every third day.

Earlier in 2020 the Ndlambe Municipality received R20-million from the Eastern Cape government for a desalination plant — the national Department for Water Affairs added another R80-million. The original tender was for a two-million-litre a day desalination plant on the banks of the Kowie River.

Nlambe acting municipal manager Mlungisi Klaas said the area was in desperate need of water. Water rationing has already been implemented and water is being carted to residents at a high cost from nearby Cannon Rocks. This water isn’t used to flush toilets and as a result a health risk has developed in the area and there has been a number of protests.

Klaas said hospitals and schools are at risk and other municipal services had to be curtailed because of the funding spent on carting water.

Two bids were shortlisted – one by Quality Filtration Systems for R40.2-million and one by MEB for R132-million.

The tender was awarded to QFS on February 11. It turned out that the tender was valued for R111.2-million, but the sudden increase was not explained.

MEB applied for an interdict to stop the tender from being awarded and in papers before court made a number of allegations of corruption.

Roberson said that while the municipality has asked for these allegations to be struck from the court papers, she found that there were enough concerns to justify an emergency interdict.

These included that none of the companies scored high enough for the tender to be successful in terms of the Preferential Procurement Policy Framework published in 2007.

She said QFS had, according to the bid evaluation report, planned to use a municipal fire hydrant to discharge the water from the plant and was asked to redesign its plant to allow for the water to go through the water treatment plant.

She also questioned why the municipality then decided, after the bids had closed, to upgrade the project to a five-million-litre plant and allowed only shortlisted bidders to bid for this project.

Roberson ordered that the conclusion of the tender process and any contracts be placed on hold until March 17. She also ordered MEB to institute review proceedings to have the award of the tender set aside. She said the court would sit again on March 17 to hear an application by the municipality to strike out certain allegations made by MEB.

Herman Smit from QFS said in response to the judgment that allegations of corruption had not been levelled against his company. He said they had not opposed the application by MEB Energy. “We decided to abide by the court's decision.”

Smit said the original QFS bid for about R40-million was for a two-million-litre-a-day desalination plant.

“This capacity was increased to five million litres of mixed treatment sources during the design phase of the project to fulfil the needs of the town. The five million litre desalination plant was not viable as a result of capital and operational cost constraints. A mixture of desalinated and wastewater reuse is a far more viable and a sustainable solution for small coastal towns.”

He denied that the original QFS design allowed for a connection to a fire hydrant and said the company was still in the “design phase” and deciding how the desalination plant would connect to the town’s water system.

On Tuesday, the mayor of the Ndlambe Municipality, Khululwa Ncamiso, issued a statement saying that claims in papers before court that a municipal official solicited a bribe during the tender procedures were false. He said the municipality had applied to the court to have all these allegations struck from the court papers on the basis that there was no affidavit from the person who solicited the bribe to support the claims.

According to the statement, the acting municipal manager remarked that it was strange that there were meetings between MEB and the person who was alleged to have solicited a bribe. The bribery allegations will be the subject of an urgent court hearing scheduled for next Tuesday.

Despite good rainfall in the area, the water situation in Port Alfred remains dire, according to one of the municipal councillors, Ray Schenk. “The situation here is critical, but not desperate,” he said, adding that due to some rain falling in the area water tanks at residences had filled up.

“We have had a drought for two years with significantly less rainfall over the past two years. We used to get between 650mm to 700mm a year,” Schenk said. “For the past two years we received 504mm to 507mm of rain a year.

He said in October 2019 levels in the Sarel Hayward dam became too low for water to be drawn from it. Water shedding was implemented and residents receive water only every third day.

“There are water trucks carting water as well. It is a sad situation,” he said. “We really need to get water supply back very soon,” Schenk said.

“People are phoning me every day to complain. The problem is that when water is sent to areas, the infrastructure often collapses and due to pipes bursting, residents then have to remain without water until it is their turn again. That means they will have no water for six days.

“Load shedding is also interfering with our pumping schedules,” Schenk said.

MEB did not respond to a request for comment, neither did the Department of Water Affairs and the Eastern Cape Department of Co-operative Governance. Both departments provided public funding for the desalination plant. MC