Legal Considerations Before Cape Town Water Can Flow

Ricardo Pillay | Dentons

Facing its longest drought in recent history, Cape Town is preparing itself for the inevitability of “Day Zero” – the moment it runs out of water completely. The City has developed a water augmentation plan, which includes the construction of desalination plants at several locations, and has issued tenders for the projects. However, critics – especially water treatment companies eager to submit their proposals – have accused the municipality of taking too long to start the process.

Legal requirements: protection, not delays
According to Ricardo Pillay, a partner at law firm Dentons, the perceived lag stems not from negligence on the part of the City. Rather, it’s constrained by its obligation to follow strict legal procurement procedures that align with the principles of the Constitution and relevant procurement legislation. “Failure to comply with tendering and public procurement laws could result in significant delays that would, in fact, impact on the lawfulness of the award of a tender with the consequent delays in the delivery of water to the public.”

Pillay warned that the procurement legislation ensures “a fair, equitable, transparent, competitive and cost-effective procurement process that supports competition, BBBEE requirements and promotes economic growth by employing and empowering local labour and sourcing production content locally. A departure from these core principles threatens the sanctity of the award of a lawful tender. This is particularly crucial in the construction sector where the government has a responsibility to ensure that all contracting parties have equal access to competition in the sector”.

“Emergency conditions may present itself as excuse to bypass correct procedure, but doing so presents immense risk for the state owned entity, the project and the public at large,” says Pillay. For example, a disgruntled vendor who feels a contract was unlawfully awarded to another party could contest it in court, effectively bringing the project to a halt.

Although time consuming, adherence to the law throughout the project lifecycle, in particular during the procurement stage, ensures the prompt delivery of promised benefits and its sustainability.

Meeting the legal requirements for all phases of public procurement ensures that critical services are implemented as soon as possible while protecting the constitutional rights of every stakeholder. “Water delivered outside lawful processes could run dry very quickly,” warns Pillay. “It may be impractical under urgent or emergency circumstances to go out to tender. However, using this exception, provided for under the procurement legislation, must be exercised under proper legal guidance. To ensure that public money is spent in an effective and efficient manner, the procurement process must be respected and adhered to, notwithstanding the delays caused by a commitment to compliance.”

Before
In the initial phases, it’s critical to pursue the correct tender process, develop watertight RFP’s, check proposals thoroughly against legislation and perform any other due diligence. Only then should a contract be created, also carefully developed by an experienced legal team to address all relevant laws.

During
Independent audits can be carried out to ensure adherence to requirements. Are workers representative of the submitted BEE certificate? Is work being performed to plan? Is this happening throughout the supply chain? Audits reveal the facts and provide learnings that can be applied to future undertakings.

As the project progresses, changes to contracts may become necessary. This and the initial development of contracts are administered through the process of contract management, another area requiring legal oversight. Arbitration and dispute resolution are also important legal services both during and after a project. Resolving conflict professionally and amicably as it occurs avoids stoppages. Failing in either contract management or dispute resolution usually results in project delays or budget overruns.

After
Once delivered, a project needs to be operated and maintained. Funding models for operations and maintenance agreements must be appropriate to the project type. Once again, the legal aspects of this phase cannot be overlooked. Proper maintenance and operation models should be agreed on in the tender stage.

Related Content

#MiningIndaba2020: FTI Consulting MD Michael Ryan reflects on 25 years of the Mining Indaba

As the Mining Indaba entered its third day in Cape Town people are taking stock of how much it has changed over the last quarter of a century and in particular during the last turbulent decade of uncertainty. The organisers of the Mining Indaba claim numbers are up this year, CNBC Africa’s Chris Bishop spoke to one of the delegates Michael Ryan.

#MiningIndaba2020: These top ten trends will shape the mining sector in 2020

African Mining Indaba 2020 released its top 10 trends reports and CNBC Africa’s Chris Bishop spoke to mining expert, Andrew Swart outline how he sees the trends.

#MiningIndaba2020: Wade-Smith discusses the value of UK-Africa trade relationship in mining sector

At the ongoing African Mining Indaba, CNBC Africa’s Chris Bishop caught up with Emma Wade-Smith, Her Majesty’s Trade Commissioner for Africa at the UK Department for International Trade and they discussed the importance of Africa’s mining industry to the United Kingdom.

#MiningIndaba2020: GIADEC CEO Michael Ansah on opportunities, projects in Ghana’s mining industry

The Ghana Integrated Aluminium Development Corporation (GIADEC) plans to add significant value to the country’s Bauxite resources. GIADEC CEO, Michael Ernest Ansah says besides bauxite work is in place to revamp the Valco Aluminum Smelter in Ghana. Ansah discussed the opportunities in Ghana’s mining economy with CNBC Africa’s Chris Bishop on the side-lines of the Africa Mining Indaba.

Subscribe to our newsletter

Sign up for free newsletters and get more CNBC AFRICA delivered to your inbox

More from CNBC Africa

Does the Competition Competition have capacity to clamp down on COVID-19 profiteering?

As South Africa sees a surge in COVID-19 infections, consumers are increasingly faced with overpriced products on the shelves. The Competition Commission continues to receive complaints, from customers who are already feeling the pinch. The question is, does the Competition Competition have the capacity to clamp down on price gouging? Joining CNBC Africa for this discussion is Makgale Mohlala, Head of Cartels at the Competition Commission and Shawn van der Meulen, Partner at Webber Wentzel.

Uganda’s central bank may cap commercial bank interest rates

KAMPALA (Reuters) - Uganda’s central Bank (BoU) has threatened to cap the interest that commercial banks can charge borrowers, after the industry...

Jambojet set to resume domestic flights on July 15

Jambojet gears up for local flight resumption; lower oil imports and higher tea exports spell current account improvement and the Central Bank invites bids for millions in treasury bonds. Journalist, Joseph Bonyo joins CNBC Afric for more.

Chamber launches business clinics to support women-led businesses

Rwanda’s women entrepreneurs arm under the private sector federation body has launched a series of business clinics with the aim of supporting women-led businesses affected by the Covid-19 pandemic. CNBC Africa spoke to Agnes Samputu, Executive Director of the Rwanda Chamber of Women Entrepreneurs for more.

Partner Content

Maktech’s Godwin Makyao: Now Is A Time of Entrepreneurial Opportunity in East Africa

As an executive decision-maker in both the telecommunications and tourism industries, Godwin Makyao could not have experienced a more diverse set of...

Sanlam launches urgent job-preservation initiative in response to COVID-19

Sanlam Investments is responding to the COVID-19 pandemic through large-scale support of the recovery of South African companies, from small enterprises to...

Trending Now

Africa urged to test more as coronavirus cases exceed 500,000

The African Union Commission said on Thursday it had launched a consortium for vaccine clinical trials to be headed by the Africa CDC, which aimed to secure more than 10 late stage vaccine clinical trials as early as possible.

Malawi’s new female cabinet ministers vow to push for jobs for women

Women now hold 39% of the ministerial and deputy minister roles in the cabinet appointed by Chakwera, 65, who unseated Peter Mutharika in a re-run presidential election last month, which compared to about 20% in the previous government.

Dow, S&P 500 end lower on fears over surging virus cases but Nasdaq hits record high

he Nasdaq hit another record high, however, helped by gains in Amazon.com (AMZN.O), Microsoft Corp (MSFT.O) and Apple Inc (AAPL.O).

Eskom goes after contractors over R4bn Kusile over-payment

One of the power stations that were meant to be the saviour of South Africa’s power supply is causing controversy, even before it’s in full working order. In an explosive letter, Public Enterprises Minister Pravin Gordhan named contractors that he says Eskom over-paid by R4 billion, in the construction of Kusile power station. Sikonathi Mantshantsha, National Spokesperson of Eskom joins CNBC Africa for more
- Advertisement -