The Gauteng Department of Infrastructure Development has been ordered to pay more than R14-million to a private architectural and engineering company for services it rendered to some of the province’s public hospitals.
In a judgment handed down this week by the Johannesburg High Court, acting judge Heidi Barnes said the provincial department had to pay Maru Spaces Consortium, a private company based in Midrand, Gauteng, R14 808 636.
In February this year, Maru Spaces Consortium brought an application before the Johannesburg High Court to claim payment of monies owed to it by the provincial department for professional services it rendered to Sebokeng, Kopanong, and Heidelberg Hospitals between 2017 and 2021. The private company and the provincial department entered into a service level agreement on August 15, 2017, allowing Maru Spaces Consortium to provide the department with professional services in architectural and multi-disciplinary engineering services in respect of a costed maintenance implementation plan for certain hospitals in the south corridor of Gauteng.
“The service level agreement provided that the applicant (Maru Spaces Consortium) would invoice the respondent (Gauteng provincial government: department of infrastructure development) for services rendered and that invoices were payable by the respondent within 30 days of receipt thereof.
“The applicant commenced the provision of services on 26 July 2017. All went well for a period of some two and a half years until February 2020 when the respondent ceased making payment for services rendered. The respondent, however, gave repeated assurances that payments would be forthcoming, and on the strength of this, the applicant continued rendering services.
“By December 2021, it had become impossible for the applicant to continue rendering services in the absence of payment and on 7 December 2021 the applicant informed the respondent that the rendering of services would be suspended until all outstanding payments had been made. The applicant did so in terms of the provisions of clause 11 of the service level agreement…” said Barnes.
Barnes said as of December 7, 2021, when Maru suspended the provision of services, the department owed the company R14 808 636 inclusive of VAT made up as follows; R9 510 237 for services rendered in respect of the Sebokeng Hospital; R4 794 625 for services rendered in respect of the Kopanong Hospital; and R503 773 for services rendered in respect of the Heidelberg Hospital.
The legal team representing the department said it should not pay the company for all the amounts it claimed. The department, through its lawyers, said when specialist services were procured, there was no appropriated budget to undertake the service.
“An investigation by the respondent found that PSPs (professional services providers) were appointed by the respondent on the instruction of the Gauteng department of health without funding allocated in the estimates of capital expenditure. The applicant was always aware of this and of the attempts to try and remedy the situation and get approval. This has proved unsuccessful, and the respondent is not liable to pay all the amounts claimed as same is unauthorised,” said Advocate L Siyo.
Barnes dismissed the department’s argument. “The respondent cannot, where a binding contract has been concluded and payment has fallen due in terms thereof, seek to evade payment on the basis that it has not been properly budgeted for…The respondent is ordered to pay the applicant the sum of R14 808 636 inclusive of VAT, within 30 days of the date of this judgment. The respondent is ordered to pay the applicant’s costs.”
