10 Apr 2022

Water Utilities Corporation (WUC) and China Jiangsu International (Pty) Ltd joint venture with Unik Construction (Pty) Ltd matter was settled out of court five years ago.

Answering a parliamentary question recently, Minister of Land Management, Water and Sanitation Services, Mr Kefentse Mzwinila explained that a tender for the design, supply, installation and commissioning of Mmamashia Water Treatment Plant was awarded to China Jiang Su International (Pty) Ltd in joint venture with Unik Construction Engineering in October 2018.

Mr Mzwinila added that the contract was terminated in January 2019 after receipt of advice and request from the Directorate of Intelligence and Security Services (DISS) to terminate all projects and dealings with China Jiang Su International (Pty) Ltd.

“The reason was that the company was engaged in activities threatening national security and upon receipt of the letter of termination, the contractor filed an urgent application with the High Court alleging breach of contract and seeking to interdict the projects until the court made a pronouncement on legality of the termination,” he said.

He indicated that the interdict was granted and in March 2019, the parties attempted to settle the dispute by utilising the dispute adjudication board as provided in the contract.

“The dispute adjudication board agreement was signed in July 2019 after protracted negotiations that started in March 2019 but there was very little movement in the process. In recognition of the lack of progress in the dispute, the dispute adjudication board process which was jeorpadising the continuation of a strategic national project, WUC made a decision to settle the matter out of court to enable the project to continue,” he said.

Parliament also heard that P112m was paid to the joint venture as settlement of the terminated contract and a court order was issued to that effect and that the amount included Value Added Tax (VAT), loss of profits and actual works that the contractor had undertaken or performed by the time the contract was terminated.

MP for Maun West, Mr Dumelang Saleshando had asked the minister to brief Parliament on the out of court settlement between Water Utilities Corporation and independent contractors.

Mr Saleshando also asked the minister to state all contractors that WUC had to pay out of court settlements in the last five years, amounts paid, nature of the disputes that led to the settlements and the role played by the DISS in the matter. ENDS