The owners of the Waterfront desalination plant say they are suing the City of Cape Town for breach of contract, and have shut the plant down during the process.
This after the City failed to pay Quality Filtration Systems (QFS) the full value of the contract, which was R53 million. To date, the City has only paid them R1.7 million.
The desalination plant, which pumped two megalitres of water into the water system a day, will remain dormant until the dispute is solved.
According to Herman Smit, the managing director of QFS, the City contracted the company in January last year, during the drought, to provide one of three desalination plants to produce fresh drinking water using sea water in a bid to beat Day Zero.
“QFS won a tender with the City of Cape Town and funded the installation of the desalination plant in the Waterfront.
“We are suing the City since they are in breach of contract and have not made payments required within the contract. The original contract was valued at R53 million, only
R1.7 million has been paid so far and we are owed over
R20 million to date.
A number of disputes related to the payment of the contract remain unresolved and we had to appeal to the High Court to ensure the CoCT met us for mediation to try and negotiate the payment of the contract. We were in mediation for five days with five attorneys and one advocate and we reached no solution at the end of the period.”
The City remained tight-lipped about the dispute but admitted that an agreement hadn’t been reached during mediation.
Mayoral committee member for water and waste, Xanthea Limberg, said there was a dispute on several issues pertaining to the tender contract.
“The City is not at liberty to disclose the detail in the media due to confidentiality provisions in the mediation agreement.
“However, we can say that every effort was made on the City’s part to achieve resolution and move forward in a manner that is legally fair to both parties. The mediation concluded without a settlement being reached. The City is currently evaluating its position.”
The City refused to publish the mediation report due to “confidentiality provisions in the mediation agreement”.
Musa Ndlovu, the director and an engineer at QFS, said more than 181 000 kl of water has been injected into the City’s network by the QFS plant.
“The City has sold this water on at an augmented price but has to date only paid QFS
“The City is now claiming that the water that was willfully sold on at a premium rate, was not to specification.”
QFS’s decision to shut down the plant came after the City had not verified whether the water was fit for human consumption.
Associated engineer Nico Ben said the raw water from the plant was full of algae and bacteria, which blocked the filter quickly.
“The operators have to shut the plant down every eight hours to replace filters. This takes about three hours at a time. When the plant was first operational, it produced two megalitres of water a day which went into the City’s water supply.
“One of the points we made in the dispute is that the City is not complying as a water service provider. After we produce the water, the City needs to verify whether it is safe for human consumption. So to stay on the right side of the law as we are not certified, we had shut the plant down until a time that the dispute is solved.”
Mr Smit said the water services act was very clear regarding the responsibilities of a Water Services Provider and negligence here would result in illegal water supply to the public.
“The City wants to place all these responsibilities on QFS as the contractor responsible for change in sea water quality, network pressures and additional treatments costs. These are risks that the City was aware of.”
Ms Limberg said water purchased by the City is compliant with relevant standards.
An activist for the lobby group StopCoT, Sandra Dickson, said she was concerned about the situation when she realised a change in pattern in the water augmentation charts she checks weekly on the City’s website.
She said she visited the other desalination plants in Strandfontein and Monwabisi and found that the plants were not functional but she received no information from the employees on site.
When she visited the Waterfront desalination plant, they had explained to her about the problems with the water and the filters.
She said she was alarmed that the City would not release the mediation report, saying that it was the people’s money paying for the desalination plant and the water, and it was worrying that QFS had not been paid yet, which is seriously affecting its business.
Mr Smit said the need for the legal process was because QFS continued to suffer serious damages as a result of the non-payment and breaches of contract.
He said QFS applied to the City Manager for appointment of an independent mediator, however, the City neglected its responsibility towards the contract and did not proceed with a mediation process. This forced QFS to get an urgent High Court order to compel the City to proceed with mediation.
“Given that the mediation process clearly showed the City’s gross mismanagement of the contractual process, the City’s attorney’s vehemently objected to the release of a mediation report. This was despite the City having spent almost R3 million on the mediation process.”
He said QFS were not responsible for the legal aspects of the risk analyses and water safety plan.
“These issues were City’s responsibility, but were clearly not properly executed. The public should be made fully aware of the City’s failings in this regard, especially in light of the City’s plans to spend a further R5 billion on water augmentation projects.
“We understand that desalination is no longer considered a viable water augmentation solution for the City of Cape Town. The City of Town appears to view this as reason not to honour existing contracts,” said Ms Ndlovu.
Ms Limberg responded to detailed questions from the CapeTowner by saying that the City was evaluating its position.