KZN medical waste company fails to stop award of rival contractor

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A medical waste company that has been the sole medical waste service provider in KwaZulu-Natal for the past 20 years has failed in its court bid to stop the appointment of a new contractor after the termination of its multimillion-rand contract. The Times reports that the Pietermaritzburg High Court dismissed an urgent application by Compass Medical Waste, a Durban-based company with a national footprint, to set aside the termination of their contract to dispose of body parts and hazardous waste from state hospitals to clinics.

The company also sought to stop the appointment of Buhle Waste by the KZN Health Department to take over the contract, arguing it was not a “competitive” process and was therefore irregular. But Judge Jerome Mnguni dismissed the application with costs, adding that he would give his reasons for dismissing it on Tuesday next week. However, the judge pointed out Compass were still within their rights to bring a review application at a later stage.

The report says throughout the court proceedings, Judge Mnguni contended he could not condone an “unlawful act” by allowing Compass’s old month-to-month contract to be extended by the provincial department of health. “There is something going on in this, but even if that is so, can I condone an unlawful act? Clearly in everybody’s book the 2013 contract for 10 years is unlawful. It’s for the department to sort it out, and it’s not for the court. It’s improper to engage in conduct that circumvents the constitution. We owe it to this country to be honest and transparent because it is their money and not the department’s money,” said the judge.

The report says he was referring to the 2013 contract that is the subject of another court action instituted by Compass in 2015, in which it contended the department had allegedly frustrated its implementation. Compass lodged an urgent court application two weeks ago after the department terminated the contract with effect from 30 April with a one-month notice. In his affidavit in opposition to the termination of the contract, Compass MD Ian du Randt said if the interdict were not granted, Compass would be required to remove its services and personnel who render services to various hospitals and clinics throughout the province on Worker’ Day.

He also argued the termination would also cause “extreme disruption” to various hospitals and clinics familiar with how Compass rendered the services it had delivered for many years and that the appointment of a new contractor would contravene procurement laws and require Compass to retrench some 107 workers.

The report says despite the application, the department went ahead and appointed Johannesburg-based Buhle Waste, a company that once clashed with Compass over a multimillion-rand medical waste tender in Limpopo, to take over the contract with effect from 1 May.

Compass argued in court that the appointment of Buhle Waste was not done via a “competitive” process, and appealed for the status quo to remain until the matter was resolved. In his answering affidavit, the department’s senior legal manager Steve Mkasi said Buhle Waste had been “lawfully awarded the contract, and in fact, its rights need to be protected and not Compass’s rights (which had been extinguished when the contract expired due to the effluxion of time)”.

“I respectfully submit that the present application was brought to intimidate the department at a time when the contract with Compass had expired with effluxion of time. In any event, Compass’s financial and ultraistic motives are ill-founded given that it is a company with a national footprint and services the private health sector, including hospitals, clinics and medical practices extensively.”

The department’s legal representative, advocate Rajesh Choudree, said of the court outcome: “All I can say is that Judge Mnguni made a correct decision because a month-to-month contract is concluded and terminable on a month’s notice. And I think our clients are delighted.”

In response to the court decision, a Compass legal representative who did not want to be identified said: “I can say that the review application will still continue about the appointment because the judge has intimated that the appointment of Buhle was irregular and we can continue with our rights to have that set aside.”

The report says Buhle Waste owner Dr Phetole Sekete was happy at the court’s decision to dismiss Compass’s application to have their appointment set aside. He said his company was ready in terms of infrastructure, the staffing component, resources and funding to execute the contract. “We’re ready to roll and we’ll make sure that we don’t disappoint the people of KwaZulu-Natal. We’re going to introduce new systems to improve the health of all the people in KwaZulu-Natal,” he said. Buhle Waste joined the court proceedings as an intervening party.

The report says it’s not for the first time that Buhle and Compass have locked horns over the awarding of a medical waste contract. In 2010 Compass took the Limpopo government to court over a lucrative three-year R200m medical waste removal contract that was awarded to a consortium made up of Buhle Waste and Ingwe Waste Management.

Du Randt argued at the time there were irregularities in the awarding of the tender and that due processes were not followed. He said his company learned only through newspaper reports that the contract had been awarded to the consortium, without reasons being given for the decision.

The Times report

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