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High Court rules in favour of SITA in controversial Eastern Cape broadband contract

Oct 30, 2018
High Court rules in favour of SITA in controversial Eastern Cape broadband contract

The Eastern Cape provincial government illegally acquired technological services from telecommunications company Liquid Telecom in contravention of the State Information Technology Agency (SITA) Act and National Treasury Regulations.

Ruling that a large October 2017 contract awarded by the province to Liquid Telecom for the roll-out of broadband services to 2 700 sites across the province be reviewed, Judge John Smith said legally it was SITA’s role to “facilitate the acquisition of technology services by government departments”.

The matter was heard in the Bisho High Court last week: 23 October 2018.

Court papers stated that SITA’s application against the Premier of the Eastern Cape and Liquid Telecoms stemmed from the request by the provincial government to SITA CEO: Dr. Setumo Mohapi early in 2017 to use an existing contract with the Western Cape government for its new broadband connectivity network.

This would essentially boil down to “piggybacking” on the lawful Western Cape contract that SITA awarded to Neotel in 2014 in an open bidding process.

Judge Smith said there could be “little doubt about SITA’s standing to challenge any attempt by a government department to acquire technological information services without its involvement and in contravention of the SITA act”.

He added that the Eastern Cape contract “was not awarded pursuant to competitive bidding”.

He furthermore stated that SITA had “made every effort to settle the matter without the need to resort to legal proceedings”, but that it was clear that the Eastern Cape provincial government had been “adamant” to proceed without SITA’s approval.

Referring to “the crux of the matter”, Judge Smith said the Director General of the Western Cape had been “factually and legally correct” when it initially pointed out to the Eastern Cape government that it needed approval from SITA to participate in the existing contract.

Eastern Cape government did not obtain SITA’s written approval to participate in the Western Cape contract

Judge Smith therefore ruled that the Eastern Cape government did not obtain SITA’s written approval to participate in the Western Cape contract in terms of Treasury regulations and that the decision to appoint Liquid Telecom to provide the broadband services was consequently reviewable.

Considering the advantages that broadband roll-out would have for the people of the Eastern Cape, government departments and services such as schools hospitals and clinics, simply setting aside the contract may have “deleterious consequences for the people of the Eastern Cape” and “probably result in a waste of public funds”, Judge Smith noted.

Also postponing making a costs order, he asked both parties to return to court to submit arguments regarding a “just and equitable remedy” in the matter. SITA is due to file its argument by 2 November and the respondents by 16 November.

SITA has noticed that, notwithstanding the ongoing court proceedings and ruling, the Eastern Cape provincial government has published a tender notice in papers, reiterating that Liquid Telecom had been appointed for the provision of broadband connectivity in the province.

Dr Mohapi said the publication of the notice at this stage was extremely unfortunate; and reiterated SITA’s commitment to working with the Eastern Cape government to find a solution that did not jeopardise broadband roll-out for the people of the Eastern Cape.

The Eastern Cape provincial government tender notice states that the contract had been “formally awarded” as per Treasury Regulation Section 16A.6, and summarises the scope of work in terms of technical and other requirements, and a services component.

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