No penalties for RO plant delays

The appointed contractor for Port Alfred’s new reverse osmosis plant could be forking out as much as R12,800 a day in penalties for delays, but has been let off the hook by Ndlambe Municipality.

The municipality announced the appointment of a contractor, Quality Filtration Systems (QFS), in a statement on November 25, and said “work will commence on the installation of the plant as soon as possible.  It is anticipated that the plant will be in production by end January 2020 [they meant 2021].”

However, in the final full council meeting of 2020 on December 10, the date for completion of the plant was pushed to the end of February 2021, something which escaped most people’s notice.

Then, in an update from the municipality on February 3, they said there had been a delay in the contractor getting the required work permit.

“The contractor received the permit on January 29 instead of January 9, hence the contractor only started on site recently, but it must be noted that the contractor had commenced in December to work at the manufacturing plant in Cape Town,” municipal manager Rolly Dumezweni said in the statement.

Dumezweni said the first consignment of equipment and materials would arrive in Port Alfred by mid-February.

“Contractually the completion date of the 2ML/day plant has now moved to beginning April due to the delays mentioned above. The contractor is working hard to ensure that this contract completion time is reduced where possible.”

Dumezweni said the first consignment of equipment and materials would arrive in Port Alfred by mid-February. When TotT visited the construction site of the plant last Thursday, two containers used as site offices were there, with some staff present. No plant was visible.

Not mentioned since the awarding of the current tender is the R30-million worth of equipment already manufactured by QFS

Not mentioned since the awarding of the current tender is the R30-million worth of equipment already manufactured by QFS for the Port Alfred RO project after they won the initial tender more than a year ago. The original tender was later set aside by the Grahamstown High Court, the judge declaring Ndlambe’s tender process irregular and unlawful.

The municipality had paid R20-million to QFS before a contract had even been signed. When Judge Phillip Zilwa overturned the tender and contract, he said QFS would have to pay the R20m back to Ndlambe. QFS refused to, but faced no consequences.

At the time, QFS Eastern Cape director Musawenkosi Ndlovu said: “QFS has determined the equipment manufactured for the Kowie project is valued higher than the payment paid to QFS. Various administrative shortcomings have resulted in substantial damages to QFS.”

In September last year, mayor Khululwa Ncamiso announced that the municipality would pay an additional R10.5-million to procure the RO equipment already manufactured and acquired by QFS.

The DA objected strongly to the proposal. A motion submitted in council by councillor Phil Kani stated: “It moves that no further money be paid to this service provider, and that all avenues (including legal) be aggressively pursued to recover those monies paid to date. Lastly, it demands that council initiate a full investigation into those individuals who authorised the ‘prepayment’ of the R20m to QFS, ahead of any tender contract being signed.

The DA believes that any attempt to throw more money to QFS is simply a smokescreen to cover the already illegal activity, and set QFS up as the preferred bidder in the new tender process

“The DA believes that any attempt to throw more money to QFS is simply a smokescreen to cover the already illegal activity, and set QFS up as the preferred bidder in the new tender process. It would be unacceptable and unreasonable to expect any other contractor to come in and take over QFS’ problems and equipment.”

QFS was indeed the preferred bidder when the project went out to tender again, although this time it was not the lowest bidder. Its bid of R128.5-million was twice the price of the lowest bidder, Amulet Group, which bid just over R62-million.

Also not explained is why the municipality changed from the 5ML seawater RO (SWRO) specifications in its original tender, to a 2ML SWRO plant and a 3ML wastewater reclamation plant (converting sewage to drinking water) in the current tender

Also not explained is why the municipality changed from the 5ML seawater RO (SWRO) specifications in its original tender, to a 2ML SWRO plant and a 3ML wastewater reclamation plant (converting sewage to drinking water) in the current tender, with the site of the plant relocated to be adjacent to the sewerage works. Doubts have been raised that Port Alfred produces enough sewage to reclaim 3ML for drinking water.

According to the tender document, the time for completion of the first phase 2 megalitre (ML) SWRO plant and associated works is 83 days. It was meant to start in December, with a construction break from December 24 2020 to January 3 2021. The second phase 3ML water reclamation plant is a 131 day project, also excluding a construction break from December 24 2020 to January 3 2021 – which also anticipated a December start.

There is a delay damages clause in the tender document of 0.1% on capital value per section, per day, which equals a potential R12,800 per day when combining both phases of the plant.

The maximum amount of delay damages is 10% of the contract price for the design-build value applicable per section, meaning a potential R12.8-million in penalties.

The municipality has not responded to a request for comment.

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