The high court has lambasted the cash-strapped Ditsobotla municipality for attacking its administrative Acts by attempting to withdraw a R7.5m contract it gave to a company that saved and restored its collapsing electricity supply two years ago.
This after the North West municipality’s court application to have the contract with Kwende Construction squashed by the high court in Mahikeng failed last week. Instead, the court reinforced its July order compelling the council to pay the outstanding R6.7m debt owed to Kwende.
The company was hired in 2023 in an emergency procurement to save the collapsing power supply, which had affected a large part of Ditsobotla. However, on completion of the job and receiving the Certificate of Completion from the council, Kwende was only paid R1m due to Ditsobotla’s cash flow problems.
According to the court papers, on 22 December 2023, the municipality signed an Acknowledgement of Debt (AOD) explicitly recognising its indebtedness to Kwende in the outstanding sum. It further recorded that all internal processes, prescripts and procurement obligations had been followed.
After years of not settling the bill, Kwende took Ditsobotla to court and in July, the court ruled in its favour.
However, Ditsobotla has since disputed the amount owed and declared the procurement process irregular, rendering the contract invalid and that there was no emergency in sourcing the tender.
But acting judge Charlotte Oosthuizen-Senekal dismissed this, accusing the municipality of attacking its laws while citing the admissions in the AOD the council signed.
“The allegation that there existed a material dispute of fact barring motion procedure is contradicted by the evidential record. The municipality produced no contrary invoices, no recalculations, no procurement file, no internal correspondence, no budget records, and no proof of irregular pricing,” read her judgement.
The allegation that there existed a material dispute of fact barring motion procedure is contradicted by the evidential record.
— Charlotte Oosthuizen-Seneka, acting judge
The judge added that Kwende placed before the court a bundle of documents which it got from Ditsobotla which dispute the allegation of incorrect billing.
“It is of particular significance that throughout its answering papers, the Ditsobotla never once disputed the quantum of the outstanding amount reflected in these documents, nor did it tender any alternative calculation, evidence or explanation suggesting that the capital sum acknowledged and certified was inaccurate," read Oosthuizen-Senekal’s judgement.
“When confronted with its records, Ditsobotla offered nothing more than generalised denial, unsupported by countervailing facts. However, such bald denial is incapable of generating a genuine dispute of fact,” she said.
She also dismissed Ditsobotla’s assertion that the contract was invalid due to irregular procurement.
“This ground also fails. Factually, Ditsobotla confirmed lawful procurement processes in the very Acknowledgement of Debt that it signed.”
She further said Ditsobotla did not apply to set aside the appointment of Kwende, the Certificate of Completion and the AOD.
“A municipality cannot sidestep review and resist contractual enforcement through collateral attack. Doing so violates legality itself... Ditsobotla’s stance, when properly analysed, is nothing more than an impermissible collateral attack on its own administrative acts. If Ditsobotla genuinely believed that the procurement process underpinning the appointment of Kwende was unlawful, it was constitutionally obliged to institute formal review proceedings to challenge that decision,” read the judgement.
The municipality also failed to appeal the July order within 15 days but only did so three months later. They claimed a payment dispute with their lawyers whom they could not pay.
The judgment lands as Ditsobotla is placed under administration for the ninth time since 2008, and for the first time under national government administration due to ongoing financial and service delivery failures.
In March, political instability peaked when the municipality became divided between two mayors.
Its financial crisis worsened in August when the Reserve Bank asked the high court to liquidate the Ditsobotla Primary Savings and Credit Co-operative Bank after declaring it insolvent. The matter was set down for hearing on 29 August.
In October, during a community engagement session in Tlhabologang, Coligny, residents told co-operative governance and traditional affairs minister Velenkosini Hlabisa that they were still battling to access basic services such as water and electricity — despite the municipality being under administration.
Sowetan
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