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The construction of the Kimberley Mental Hospital, which is expected to be concluded in a year’s time, will bring to a close an 11-year nightmare that has seen building costs escalate from R290 million to R1.8 billion.
Vista Park Developers, the company that won the initial tender, made off with R450 million after its contract was cancelled when it fell badly behind schedule and the provincial department of public works realised that the company was not coping with the project.
Another company, Inyatsi Construction, was then appointed to take over where Vista Park left off. But there were serious questions raised about its registration with the construction industry board.
The public works department in the Northern Cape has now asked the Special Investigating Unit and the State Security Agency to investigate the entire tender to determine who is to blame for the mess.
Tenders for the construction of the hospital were issued in 2005 and construction began a year later. It was supposed to be finished and handed over to the department of health in 2008.
A report compiled by Parliament’s Standing Committee on Public Accounts (Scopa), which visited the area in 2012, reveals that by 2008 it had become apparent that Vista Park was not coping with the magnitude of the work. The company had fallen behind schedule and its work was found to be questionable.
“Things such as the foundation were not correct on site. In that period, the contractor had an extension,” read the report compiled by the parliamentary accounts committee.
After realising Vista Park’s incapacity to deliver on the project, the provincial public works department terminated the contract, prompting the company to approach the courts. A protracted court battle ensued. The department won the case towards the end of 2009, but not before paying the company about R450 million for the work it had already done on site.
According to the Scopa report, the provincial tender board ignored advice from the province’s public works department in 2005 to award the tender to established construction company Grinaker LTA rather than Vista Park, which was subsequently liquidated.
In 2011, the department of public works appointed Inyatsi at a cost of R400 million to finish the project. But with variations, the tender is expected to escalate to R524 million once the hospital is completed.
A document in City Press’ possession, written by a senior legal adviser for the provincial public works department who has since been suspended, revealed that Inyatsi was not registered with the Construction Industry Development Board at the time it was awarded the contract.
It is illegal to award government construction tenders to companies that are not registered with the board. Additionally, the company’s grading was seven, when the contract’s specification was for a grade nine company.
Cautioning officials, the legal adviser wrote in June 2012: “My advice, accordingly, is that the department should immediately resile from this contract as the illegality cannot be perpetuated. It will be less risky for the department to pursue this avenue at this early stage of the contract.”
Northern Cape public works department spokesperson Crystal Robertson said the department had asked for an investigation into all aspects of the tender.
“Our request has been for these independent agencies to investigate the entire project since the awarding of the first contract, the cancellation of contracts, the involvement of all role players, up until the current contractor’s operations. The findings of this investigation will be made known to the public,” she said
Inyatsi, which started experiencing its own problems, was later bought by Mota-Engil SA, a subsidiary of the Portuguese construction giant Mota-Engil.
Robertson said the Competition Commission had approved the merger, and Mota-Engil SA took over the contract, so the same workers who were employed by Inyatsi are currently on site.
Inyatsi’s directors could not be reached for comment.
The construction was supposed to be completed in May, but two weeks ago, project managers told national council of provinces delegates who visited the site that the deadline had been extended to August next year
