The City of Cape Town has announced – as predicted by The Cape Messenger – that the freeway development project proposal has been scrapped. The Cape Chamber of Commerce and Industry says the city has let the six bidders down

The City has announced that the City of Cape Town’s City Manager has, upon receiving legal advice, taken the decision to cancel the Request for Proposals (RFP) for the development of the Foreshore Freeway Precinct.

The six bidders were notified of the decision in writing on Friday, 13 July 2018 – which has turned out to be Black Friday for them. The Foreshore Freeway project has been mired in the controversy over the attempted axing of Mayor Patricia de Lille.

It was reported in February this year, the City of Cape Town announced that Mitchell Du Plessis Projects (Pty) Ltd, trading as Mitchell Du Plessis Associates, had been announced as the qualifying bidder for the development of the foreshore freeway precinct in the Mother City.

The City’s media desk confirmed that the Stage 1 bid evaluation process was concluded in February 2018. Several appeals and objections were lodged that contested the application of the evaluation criteria as set out in the RFP documentation.

Having received legal advice, the City concluded that a lack of sufficient clarity in the RFP documentation rendered the evaluation criteria vague.

“Procurement processes must be compliant with the rule of law, in particular with Section 217 of the Constitution which governs public procurement. There must be no doubt about the integrity of these processes and, as such, I have decided to cancel the RFP,”said the City Manager Lungelo Mbandazayo, who was appointed earlier this year.

“Furthermore, the economic outlook for the country has become significantly weaker since the issuing of the RFP two years ago. This change, together with the additional burdens that the City, its ratepayers, and residents are facing at the moment, cannot be ignored. The City is, therefore, reconsidering the future of this project, and we will communicate further once a decision has been made.

“In the meantime, I want to express my sincere gratitude to all of the bidders who submitted proposals and representations,” said Mbandazayo.

The Cape Messenger reported on July 4 that it was not clear whether the project would now go ahead.

Mitchell Du Plessis (MDA) was selected from seven proposals received from the private sector.

The City noted at the time that MDA’s proposals entailed the completion of the unfinished sections of the freeway – connecting Helen Suzman Boulevard, which runs from the city to Sea Point, and the connections to and from the N1 and N2 freeways. Combined with this was the erection of 3 200 “market-related” residential units and a minimum of 450 affordable residential units.

It was reported that MDA proposed to complete the highways “and to finance or cross-subsidise the new roads and affordable residential units through the development of upmarket and mid-market residential units”, according to a local news report at the time.

It was envisaged that there be 11 new tower blocks – with heights ranging between 63m, 123m and 143m – constructed with views of the mountain, sea and harbour.

However, the project has been mired with controversy. Former director in the mayor’s office Craig Kesson, wrote in an affidavit that there had been an inappropriate discussion on 5 September 2017 relating to the bid evaluation process.

He also reported, according to News24, that Moore Stephens, who advised the City on the tender issues, criticised the conduct of the commissioner of transport and urban development authority Melissa Whitehead.

Kesson reported that Moore Stephens said Whitehead had stated that a particular bid should be rejected because Mayoral Committee Member for Transport Brett Herron – a key ally of Mayor de Lille – as well as “the mayor (de Lille) and the deputy mayor (Ian Neilson) said they will never accept the… proposal”.

Whitehead has been on paid suspension since the beginning of the year.

The Kesson affidavit has been a key element of evidence used against Mayor de Lille in the Democratic Alliance’s attempts to remove De Lille as mayor. Kesson, who was also suspended after his revelations became public, has since been reinstated. He is now director of corporate services.

The Cape Messenger – which broke the story that the City was poised to cancel the project – asked the City Manager, whether the project had now been cancelled. He replied earlier this month, through the City’s media desk: “I have not yet made a decision to cancel the request for proposals relating to the Foreshore Freeway project. I can confirm that we have solicited representations and will decide on a way forward in due course.”

In an address to the full council in April, the mayor said the City’s executive management team had been briefed on the City’s foreshore freeway project and the City “is currently processing objections to the announcement of the qualifying bidder”.

She said at the time that projects of this kind were set to bring great benefit “to our residents linking them to economic and housing opportunities that are located close to public transport. Our goal is to create a compact and well-connected city and get rid of apartheid spatial planning that has put so many people far away from opportunities”. That appears to have been the last time she mentioned the project.

Meanwhile, the Cape Chamber of Commerce and Industry has noted with concern that the call for proposals for the Foreshore freeway development plan has been cancelled for legal reasons. Janine Myburgh, the chamber president, said: “What this means is that the way the City went about the proposal call and its evaluation of the bids fell short of legal requirements.

“Preparing a bid of this nature is an extremely expensive undertaking. The six bidders employed dozens of planners, architects and other top professionals to prepare their submissions and it has all come to nothing.

“When developers take part in projects like this they understand that there will be no compensation for the losers but it is a chance they are prepared to take. When the final decision is made they congratulate the winner and move on. What they do not expect is that all their proposals will be thrown out because the City got it wrong and the whole process was in some way illegal.

Myburgh said: “This raises two questions. The first is whether there will be some form of compensation for all the bidders and the second is who made the mistakes and will there be consequences? Senior City officials earn massive salaries (more than R3m a year for the Executive Directors) and business and the ratepayers have every right to expect solid professional work from them.

“The mistakes, whatever they were, have also cost the local economy an investment of a billion rands or more and how many thousands of direct and indirect jobs?

“We must also ask what the long-term consequences of this expensive disaster will be? Will good developers and professional firms become reluctant to tender for future City projects? And what of the reputational damage to the City?” she asked.

See earlier The Cape Messenger South Africa story:

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