Despite legal advice recommending otherwise, the North West Department of Health is forging ahead to defend a R36m lawsuit – being stubbornly pursued by the HoD who is already facing corruption charges related to a separate issue.
TimesLIVE reports that in the legal tussle, which began earlier this year, Bagale Consulting is suing the department for unpaid professional fees – dating back to when it was appointed in 2008 as project manager for the construction of the Lichtenburg Hospital, intended to replace General De la Rey Memorial Hospital and serve patients from the decommissioned Thusong District Hospital.
However, in 2022, the department hired MIB Infrastructure Development for a similar project, costing R27.7m. The primary distinction between the two contracts was the number of beds in the new facility: Bagale’s contract specified 150 beds, while MIB’s contract was for 120 beds.
MIB’s appointment prompted Bagale to approach the courts, as the department, which had initially offered a termination agreement and held many consultations with Bagale, proceeded with MIB to work on the same project and location.
In its defence, the department argues that it deems its contract terminated with Bagale because the project has been dormant since 2016. It further claims that although the site was consolidated into one project, it had the right to appoint multiple consultants, with different scopes.
In an attempt to defend MIB’s appointment, HoD Obakeng Mongale, who is facing corruption-related charges in a separate hospital tender worth R470m, sought a legal opinion.
The opinion provided to Mongale by Advocates Lesego Montsho-Moloisane SC and Khelu Nondwangu contradicted his position.
Both said there was no rational basis for appointing MIB Infrastructure Development on the same site where Bagale Consulting was already working.
The legal opinion also asserted that Bagale Consulting had a valid legal claim against the Department. “On the facts as they stand, the decision to appoint MIB Infrastructure, in light of the existence of a contractual relationship the Department has with Bagale Consulting, was clearly irrational, particularly in light of the statement of the bid adjudication committee that Bagale Consulting ‘are experienced and capable of providing the necessary hospital’.
“We need to point out emphatically that ‘the necessary hospital’ refers to the same Lichtenburg/General De la Rey Hospital, for which MIB Infrastructure was appointed. The Department’s decision to appoint another service provider when Bagale Consulting was performing satisfactorily, was therefore irrational and not justified,” said the advocates in the legal opinion.
“Bagale Consulting should have been invited to make representations prior to the envisaged termination. What is astonishing is that the Department has not provided any reasons and new milestones in the project and/or indicated to Bagale Consulting that it intended to appoint another service provider.
“There is no variation of the contract to justify the department’s conduct and decision to appoint MIB to the same site. The department only advised Bagale Consulting that the project would no longer be a ‘turnkey’ as was the case when appointed … The critical issue, however, remains the unexplained appointment of MIB, effectively replacing Bagale Consulting without any rational basis for doing so.”
The advocates also asserted that the department’s letter of intention to terminate Bagale, sent on 28 September 2023, was not legally valid. They further argued that the department could not justify its actions by claiming the project had been dormant since 2016.
The chief engineer, Mernard Manhivi, said during discussions with the advocates that the contract with Bagale Consulting was never signed.
The advocates found this claim to be false, as the department’s bid adjudication committee provided evidence of signed contracts and service level agreements between Bagale and the department.
In his court affidavit, Mongale, who is out on R50 000 bail, countered the allegations. He argued that it was possible to appoint multiple consultants to work on the same site, as long as their scopes of work were different.
“There is nothing wrong with appointing various consultants on the same site … While it is true that the department acted in a manner where they purported to terminate the agreement, the department was later advised that it was not necessary to do so, nor was it a legal requirement because on the facts, which are common cause, the project came to an end as soon as there were no milestones provided. In any event, the purported termination cannot revive an agreement which is deemed terminated or concluded,” said Mongale.
Bagale director Dennis Modipa rejected Mongale's argument. He asserted that both projects were essentially the same, as they both involved the construction of a new hospital.
Modipa accused Mongale of misleading the court and the public by claiming that the projects were distinct. He said both projects were being carried out on the same consolidated site simultaneously.
He also questioned the logic of the department’s actions, asking if it intended to build two hospitals with a combined capacity of 270 beds.
He argued that the appointment of MIB was unlawful and that the company did not meet due minimum procurement requirements.
Modipa argued that MIB should have been disqualified as it submitted an expired certificate for its architecture and was not registered with the South African Council for Professional Architects, barring it from providing professional architectural services.
The department and the MEC said they could not comment as the case was still before the court.
TimesLIVE article – North West health department defending R36m ‘irrational’ lawsuit (Open access)
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