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[2011] ZAKZDHC 22
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South African Container Stevedores (Pty) Ltd v Transnet Port Terminals and Others (11445/2010) [2011] ZAKZDHC 22 (30 March 2011)

IN
THE KWAZULU - NATAL HIGH COURT, DURBAN
REPUBLIC
OF SOUTH AFRICA
CASE
NO. 11445/2010
REPORTABLE
In the matter between:
SOUTH AFRICAN CONTAINER STEVEDORES
(PTY) LTD
…........................................................................................
Applicant
and
TRANSNET PORT TERMINALS
…...........................................
1
st
Respondent
NATIONAL PORTS AUTHORITY
….......................................
2
nd
Respondent
PORT SIDE STEVEDORING SERVICES
(PTY) LTD
…...............................................................................
3
rd
Respondent
UNITED MARINE INDUSTRIAL CC
t/a RAINBOW MARINE & INDUSTRIAL
…............................
4
th
Respondent
GREYSTONES CARGO SERVICES (PTY) LTD
….................
5
th
Respondent
DP WORLD CARGO SERVICES (PTY) LTD
….......................
6
th
Respondent
PACE CONTAINER STEVEDORES CC
…...............................
7
th
Respondent
THEKWENI MARINE SERVICES CC
…..................................
8
th
Respondent
­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­
JUDGMENT
NDLOVU J
[1] In this matter, which was launched in terms of Rule
53 of the Uniform Rules of Court, the applicant sought an order
reviewing
and setting aside the decision made by the first respondent
on 30 August 2010 which reduced the applicant’s container
handling
volumes as part of a tender process (“the impugned
decision”) under an invitation to tender headed with the
following
preamble:
“
Provision of container stevedoring services
for Transnet Limited trading as Transnet Port Terminals (hereinafter
referred to as
“TPT”) at the ports of Durban (Pier 1 and
Durban Container Terminal or “DCT”), Port Elizabeth (Port
Elizabeth
Container Terminal), Ngqura (Ngqura Container Terminal) and
Cape Town (Cape Town Terminal including vessels diverted from Cape
Town Container Terminal to the Cape Town Multi-Purpose Terminal due
to construction) for a period of two years. (‘the tender’)”.
The tender was given the label
“Request For Proposal” (“the RFP”) and
included in the applicant’s
founding papers.
1
[2] The notice of motion consisted of two parts, being
part A and part B. The matter was initially brought before the court
on an
urgent basis whereby the applicant sought interim relief
(contained in part A and of the notice of motion) whereby the first
respondent’s
decision aforesaid would be suspended pending this
review application, the relief sought in respect of which is
contained in part
B of the notice of motion. When the matter served
before the court for the first time on 1 October 2010 it was struck
of the roll
on the grounds of lack of urgency.
[3] In the meantime the applicant and
the first respondent (the latter being the only respondent opposing
the application) filed
all the relevant papers including their heads
of argument. Hence the matter was ready for argument on the issue of
final relief,
namely the review application, which was specially set
down on 9 November 2010, but could not be finalised on that day. It
was
reinstated for further argument on 7 January 2011. On the former
date the applicant was represented by Mr
A
Stewart SC,
with
him Mr
M du Plessis,
but on the latter, as a result of Mr
Stewart
being no longer available, by Mr
du
Plessis
. Throughout
the first respondent was represented by Mr
CJ
Pammenter SC,
with
him Mr
DJ Saks
.
[4] The second respondent was cited by virtue of the
interest it had in the provision of port services and the functioning
of port
terminals, but no relief was sought against it. The third to
eighth respondents, together with the applicant, tendered for the
stevedoring services referred to in the RFP, which was the subject of
the current dispute. (Subsequently it transpired from the
first
respondent’s answering papers that the third respondent was in
fact unsuccessful with its tender, and therefore ought
not to have
been cited at all, it seems). Accordingly, the fourth to eighth
respondents had an interest in the outcome of the dispute

adjudication on the basis that it might affect the volumes of work
allocated to them in terms of the first respondent’s decision

now sought to be reviewed and set aside. Otherwise no relief was
sought against the fourth to eighth respondents. As will become

apparent shortly, the RFP was in actual fact the second tender issued
by the first respondent in connection with the provision
of
stevedoring services at the ports concerned.
[5] The applicant is a duly registered company which
carries on business of container stevedoring from the ports of
Durban, Port
Elizabeth, Ngqura and Cape Town. It was formerly known
as South African Stevedores (SAS).
[6] The first respondent, Transnet
Port Terminals (“TPT”), formerly known as South African
Port Operations (“SAPO”),
is a business division of
Transnet Limited, a duly registered public limited company formed
pursuant to the provisions of the Legal
Succession to the South
African Transport Services Act, 1989.
2
Reference to the first respondent,
hereinafter, shall mean reference to TPT and the two citations are
used interchangeably.
[7] Previously, SAS was generally responsible for all
forms of stevedoring, including container stevedoring, at the
container terminals
throughout the Republic. As a result of the
significant growth in container handling the applicant was formed out
of SAS, registered
in 2002 and the business of container stevedoring
was then located in the applicant. At the time the applicant procured
its stevedoring
business directly from the shipping lines which
called at the ports for the loading and discharging of containers.
[8] However, in or about 2003 the first respondent (then
operating under the former name SAPO) became the procuring entity on
behalf
of the shipping lines for the provision of stevedoring
services. As to how the stevedoring operations were conducted during
the
period 2003 to 2007, for instance, in the relation to the
identity of an entity or entities which provided the service, what
volumes
were available for allocation and the methodology followed in
that regard, remained unclear on the papers and the parties did not

seem to agree thereon. However, that aspect of the matter was of no
significance to the present application.
[9] In 2007 the first respondent, for the first time,
formalised its contractual working relationship with the stevedoring
service
providers by putting the provision of stevedoring services at
the ports out to tender (hereafter referred to as “the first

tender”). Successful tenderers in respect of the first tender
included the applicant, the fourth
,
fifth, sixth, and
seventh
respondents.
[10] In terms of the first tender the period of service
was due to endure for two years but the period was extended by a
further
year, which was then due to expire on 31 July 2010. At the
end of the contract period (that is, 31 July 2010) the stevedoring
service
providers, including the applicant, were allowed to continue
with the work for a further two months whilst the first respondent

was processing the applications in respect of the second tender. It
was common cause that during the two months periods aforesaid
the
applicant was being remunerated on the basis of its tender price rate
during the previous three-year first tender period plus
a 5% increase
which the applicant had asked for and which the first respondent had
granted.
[11] Provision of stevedoring services on the basis of
the RFP was to commence on 1 September 2010. The invitation in
respect thereof
was issued on 1 March 2010, the closing date to
submit tenders being 23 March 2010. There was to be a compulsory
briefing session
scheduled for 8 March 2010. The applicant submitted
its tender and attended the compulsory briefing session.
[12] The applicant alleged that prior to the first
tender being issued out the applicant was the main container
stevedoring company
in the various ports with approximately 60% of
the market share in Durban, 55% in Port Elizabeth and about 50% in
Cape Town.
[13] Consequent to the first tender the applicant was
awarded a total volume of approximately 80 000 containers per month
in respect
of the Durban port (Piers 1 and 2), spread across all the
shipping lines which, according to the applicant, was a significant
allotment
as it represented approximately 55% of the container
stevedoring market share at the Durban port. The remaining 45% of the
container
stevedoring market share in Durban was then distributed
amongst the other five stevedoring companies that had also
successfully
tendered for the business. The applicant further alleged
that in Port Elizabeth (which included the recently opened port of
Ngqura)
the combined volumes were an average 18 000 containers per
month. In Cape Town the volumes were in the region of 8 000 per
month.
The price rate charged by the applicant was in the region of
R34 per container at all the ports.
[14] The outcome of the applicant’s tender,
pursuant to the RFP, was then received by the applicant. In terms of
the first
respondent’s letter dated 5 August 2010 the applicant
was advised that its tender was successful. The following was
contained
in the letter:
“
We refer to the tender submitted in
response to the above mentioned tender.
We have pleasure in advising you that after consideration of the
tenders submitted to us and evaluation thereof, your tender has
been
successful and that you have been nominated as the preferred supplier
for the supply of the stevedoring services at the ports
of Durban,
Port Elizabeth, Ngqura and Cape Town.
All business transactions emanating from this tender shall be subject
to the terms and conditions of the tender and draft Memorandum
of
Agreement, your response thereto and any other contractual conditions
negotiated thereafter.
Please be advised that the award for the stevedoring services is
conditional upon the following:
The acceptance of this letter; and
The negotiation and signature of an agreement within 1 (one) month
from date hereof.
Your participation in the tender process is
sincerely appreciated and we would like to extend our thanks to your
staff for the comprehensive
manner in which the information was
presented….”
3
[15] The RFP was the source document on which the legal
and contractual relationship between the first respondent and the
preferred
tenderers, including the applicant, was to be founded. It
is also on this document that the applicant and the first respondent
primarily sought to rely for their claim and defence, respectively.
What follows are some of the important and relevant provisions
of the
RFP:
15.1 “BROAD-BASED BLACK EMPOWERMENT (‘BBBEE’)
TPT fully endorses and supports the Governments Broad Based Black
Economic Empowerment Programme and it is strongly of the opinion
that
all South African business enterprises have an equal obligation to
redress the imbalances of the past.
TPT will therefore prefer to do business with
local business enterprises who share these same values and who are
prepared to contribute
to meaningful BBBEE initiatives (including,
but not limited to subcontracting and Joint Ventures) as part of
their RFP responses.
TPT will accordingly allow a “preference”
in accordance with the 10% preference system, as per the Preferential
Procurement
Policy Framework Act No 5 of 2000 (as amended), to
companies who provide a BBBEE Accreditation Certificates. All
procurement and
disposal transactions in excess of R30 000 (thirty
thousand SA Rand) will be evaluated accordingly. All transactions
below this
threshold will, as far as possible, be set aside for
Exempted Micro Enterprises (EMEs).”
4
…
“
In view of the high emphasis which TPT
places on Broad-Based Black Economic Empowerment, TPT will utilise
the 50/40/10 point preference
system, i.e. the Tenderer’s BBBEE
rating will be scored out of a maximum of ten points respectively in
the evaluation process.”
5
15.2 “IMPORTANT CONSIDERATIONS TO NOTE :
Changes or purported changes by the Tenderer to the
Tender prices will not be permitted after the closing date. …
TPT reserves the right to undertake post-tender negotiations with
those
persons appearing on the list of preferred
Tenderers, once such list is approved by the Division Acquisitional
Council.
6
TPT shall award the business to more than one (1)
Stevedore. …
Each Tender is subject
to the negotiation and conclusion of a Stevedoring Agreement. A copy
of the proposed Stevedoring Services
Agreement is attached to the
Tender (in Section 11).”
7
15.3 SCOPE OF REQUIREMENTS
“
TPT intends to sub-contract
the Stevedoring Services to more than one (1) Stevedore per port to
perform the Stevedore Services for
a period of two (2) years, with an
option to extend for a further one (1) year (in favour of TPT which
may be exercised by TPT
within its sole and unfettered discretion).”
8
15.4 EVALUATION CRITERIA
15.4.1 Critical Success Factors
“
Tenderers must submit their schedule of
prices in accordance with the pricing schedule contained in Section 6
of the Tender.
Please note that pricing is not the sole
determining factor for consideration. However, competitive pricing is
critical.”
9
15.4.2 General conditions relating to Evaluation
Criteria
“
In addition to the other “DISCLAIMERS”
contained in Section, clause 15, TPT reserves the right at all times
to:
Split the Tender and make an award of business to more than one
Tenderer for different sections of the scope of work; and/or
Withdraw this Tender in whole or in part, or not make any award of
any business to any Tenderer; and/or
Increase or decrease or in any other way vary the quantum of the
award; and/or
Shortlist the preferred Tenderer(s) based solely
upon TPT’s evaluation methodology …”
10
15.4.3 Evaluation of Methodology
“
The objective of the evaluation is to
assess all Tenderers in accordance with the criteria set out
hereunder to ensure compliance
with TPT’s aims and
requirements.
Phase 1: All Tenderers will be evaluated by TPT in terms of the
Evaluation Criteria stipulated in clauses 6; 6.1.2; 6.1.2; 6.1.3 and
6.1.4 above. Incomplete Tenders may result in disqualification
and it
is therefore critical that all documents requested in the Tender is
submitted (known as the ‘1
st
technical phase’).
Phase 2:
Physical evaluations at the Tenderers’ sites
(known as the
‘
second technical phase).
Phase 3
: Price will count for 50 points, Technical 40 points
and
BBBEE 10 points.
Phase 4:
The Tenderers with the highest scores attained (per
port) will
be recommended to the DAC for approval.
Phase 5
: After approval of the preferred Tenderers by the DAC,
post-
tender negotiations will then be conducted with the preferred
Tenderers, with a view to negotiating and finalising the terms
and conditions of the proposed Stevedoring Agreement, a
copy is included in Section 9 of this Tender.”
11
15.4.4 Pricing Schedule
“
TPT reserves the right to negotiate final
prices with the preferred Tenderers.”
“
Prices should not be subject to variation,
amendment or adjustment.”
“
TPT does not guarantee volumes of
containers to be moved.”
12
[16] As previously scheduled, on 8 March 2010 the
applicant and the other preferred tenderers, through their
representatives, attended
the compulsory briefing session at which
each tenderer (candidate) was given a copy of a document entitled
“Notes for Compulsory
Briefing Session” (“the
Notes”). In terms of the Notes “[t]he purpose of the
briefing session (was) to
ensure that all Tenderers understand what
is expected from them in regard to the tender processes and TPT’s
operational requirements
and to clarify queries raised by any
Tenderer.”
13
[17] The first respondent made certain undertakings, in
terms of the Notes, which included the following:
“
The adjudication will be based on the
following criteria with the weighted averages of Price 50, Technical
40 and BBBEE 10.”
14
“
In order to ensure that all
Tenderers are afforded an equal opportunity of competing, and also to
enable TPT to evaluate the different
proposals on an identical basis,
a process of evaluation will be followed. In order to assist all
Tenderers, a list of criteria
for such evaluation is made available
under Evaluation Criteria, Section 2, item no. 6 on page 14 of the
Tender Document.”
15
“
TPT will not engage in ‘horse
trading’ and will not disclose the prices of any Tenderer. All
financial and related information
will be regarded as strictly
confidential.”
16
[18] The Notes also contained aspects on evaluation
criteria, post-tender negotiations and BBBEE programmes in a manner
virtually
identical as contained in the RFP.
17
[19] During the briefing session the candidates were
addressed by the first respondent’s representatives, after
which the
candidates were allowed to ask any RFP-related questions
which they were requested to prepare in a written form on the sheets
provided
together with the Notes. It was indicated in the Notes that
“No answers will be given by TPT at the briefing sessions. All

the questions raised at the briefing session together with TPT’s
answers will be distributed to all the tenderers who attended
the
compulsory briefing session.”
18
According to the Notes, the question was raised as to
whether the “price” would be the only subject of
discussion at
the post-tender negotiations, to which the first
respondent furnished the following answer:
“
TPT will negotiate on various issues and
once the negotiations have been completed, TPT will allocate the
volumes and lines. It
is not possible to allocate volumes and lines
before negotiations with the shortlisted tenderers have been
completed. The proposed
Stevedoring Agreement is a standard TPT
agreement for Stevedoring which will be uniform in its operations and
the terms and conditions
will not be changed for individual
Stevedores.”
19
[20] As stipulated in the RFP, there was still to be
post-tender negotiations held between the first respondent and the
preferred
tenderers with a view to negotiate and finalise the terms
and conditions of the Stevedoring Agreement. The meeting for this
purpose
was scheduled to take place on 19 August 2010 at the first
respondent’s Durban headquarters. The representatives of both
the applicant and first respondent attended the meeting. According to
the applicant it was only at that stage that the applicant
realised
that it was not the only preferred tenderer but that there were other
tenderers who were also involved in the post-tender
negotiations with
the first respondent.
[21] During the applicant’s turn at the
post-tender negotiation table, the applicant’s representatives
were told that
its prices were high and that the applicant had to
consider revising the same. Consequently, albeit reluctantly, the
applicant
revised its price rates for the port of Durban (in the 300
000 to 700 000 band) down from R37,31 to R36,37 per container in
respect
of vessels working with container gantries and from R100.01
to R97.52 per container where vessels worked with ship cranes. The
same revision was done in respect of the ports of Cape Town and Port
Elizabeth in the same category. The applicant advised the first

respondent of these revisions accordingly.
[22] It was submitted on behalf of the applicant that
the revised price rates aforesaid were offered by the applicant based
on the
following factors:
That the correspondence of 5 August 2010 from the
first respondent indicated that the applicant was the preferred
supplier of
the stevedoring services in accordance with the
applicant’s tender.
That by revising its rates (at the instance of the
first respondent) the applicant thereby assumed or expected that
its container
handling volumes would be improved or, at the very
least, not be reduced in relation to the volumes which the
applicant had
been allotted in the past (that is, in terms of the
first contract). In other words, the applicant expected that,
having reduced
its rates as requested, its volumes would not be at
risk.
[23] However, the applicant’s assumption or
expectation aforesaid was dashed by the first respondent’s
email dated 30
August 2010 addressed to the applicant conveying the
first respondent’s decision on the allocation of container
handling
volumes during the contract period of the second tender. I
refer to the email, in part:
“
Attached please find the SACS (the
applicant’s) volumes allocated.
Kindly note that your volumes in Durban was
(sic)
halved due
to your tendered prices. The volumes will still however remain within
300 000 – 700 000 range for Durban.
The volumes in PE and CT remain more or less the same as they have
been previously – some small changes but nothing too drastic.”
[24] This is the impugned decision of the first
respondent which the applicant now seeks to be reviewed and set aside
on the basis
that it is both unlawful and unconstitutional as set out
more fully hereunder. According to the applicant, the impugned
decision
would have a very drastic negative impact on the applicant’s
business, which impact the applicant summarised as follows:
The container handling rate in the port of Durban was
effectively reduced from an average of approximately 80 000
containers
per month to about 40 000 containers per month (in peak
time). In financial terms this accounted for a reduction to the
applicant’s
gross monthly turnover from R3,3 million to R1.45
million.
In Port Elizabeth (across the ports of Port Elizabeth
and Ngqura) the applicant apprehended that the handling volumes
would
be reduced from 18 000 to about 12 000 containers
per month.
The applicant submitted that its current handling
volumes of 8 000 containers per month in Cape Town ought to
have been
increased given the fact that fewer companies (that is,
the applicant, the fifth and sixth respondents) remained to perform

the job after the previous service provider,
Port Stevedores
,
had not availed itself to provide the stevedoring services in
respect of the tender under consideration.
[25] It was further pointed out that stevedoring
services was a very labour intensive operation. For instance, in
Durban the applicant
currently employed 117 people (plus an
additional 30 employees per shift sourced from a fixed labour pool);
115 in Cape Town (inclusive
of personnel sourced from a labour pool)
and 38 in Port Elizabeth (with some variable numbers of personnel
being procured from
a labour pool). The effect of the impugned
decision was that the applicant would be left with no choice but to
retrench a substantial
proportionate percentage of its workforce.
[26] Notwithstanding the impugned
decision, on 31 August 2010 the applicant finalised and concluded the
Stevedoring Agreement with
the first respondent, a copy whereof was
annexed to the applicant’s founding papers.
20
In terms of the Stevedoring Agreement
the applicant’s price per container was set at the reduced rate
as revised by the applicant
in response to what the applicant
described as the first respondent’s threats that if the rates
remained too high the applicant’s
volumes would be reduced,
particularly in the 300 000–700 000 range for the port of
Durban.
[27] It was submitted on behalf of the applicant that
the first respondent was an organ of state as envisaged in section
217(1)
of the Constitution
21
,
read with
section 1
of the
Preferential Procurement Policy Framework
Act
>
22
(“the PPPFA”). Originally the averment of
the first respondent being an organ of state was disputed by the
first respondent.
However, at the time of argument it was no longer
in issue. On this basis, Mr
Stewart
submitted that for the purpose of procuring stevedoring
services at all South Africa’s container terminals the first
respondent
was therefore obliged to comply with the relevant
provisions of the PPPFA, which provided, amongst others, that “an
organ
of state must determine its preferential procurement policy and
implement it”
23
.
[28] Mr
Stewart
contended that the first
respondent was therefore obliged to follow a procurement system which
met the requirements of the PPPFA.
He submitted that the final
allocation of work, which was tabled in annexure “H” to
the affidavit of one Ms Van Vuuren
(the first respondent’s
employee) did not comply with
section 2(1)
of the PPPFA and, as an
organ of state, it was therefore in violation of section 217(1) of
the Constitution which required that
the tender process must to be
“fair, equitable, transparent, competitive and cost-effective.”
He argued that the applicant
was promised by the first respondent
that the PPPFA system would be applied which stipulated that the work
must be allocated to
the highest points earner, yet the ranking of
preferred tenderers in relation to the points was not the basis upon
which the work
was allocated. He submitted that the work was allotted
on a different basis.
[29] Counsel submitted that, in terms of the RFP itself,
the first respondent expressly enlisted the procurement system as
being
subject to the PPPFA. He also pointed out that the first
respondent compiled normative rules in a document known as the
Procurement
Procedures Manual (“the PPM”), a copy whereof
was included in the first respondent’s answering papers,
24
a step which was in accordance with the requirements of
the PPPFA. In that regard, the first respondent opted for a 50/40/10
formula
25
as the basis of its procurement policy, which policy the
first respondent overlooked when the final allocation of work was
done.
On this basis, Counsel argued, the first respondent was bound
to comply with the requirements set out in section 2(1) of the PPPFA

in relation to the tender process, including the allocation of
volumes.
[30] Mr
Stewart
reiterated that the RFP clearly stipulated that the
contract (and therefore the work) was to be given to the tenderer
which scored
the highest points per port, unless there was a special
reason not to do so.
26
Indeed, the applicant submitted its tender in respect of
bands per port, in accordance with the apparent requirements of the
RFP.
He opined that the RFP stipulation aforesaid did not contemplate
that the allocation of work would be processed on a national basis,

which the first respondent conceded it had subsequently done, per
annexure H.
[31] Counsel noted that the volume of work was different
at the different mentioned ports – some being busier than the
others.
He stated that had the applicant known that the allocation of
work would not be determined on a per port basis, but nationally,
the
applicant would probably or possibly have quoted its prices
differently than it did. He submitted that on a national allocation

basis it was conceivable that there could be a substantial amount of
work in some ports and very little in others. He pointed out
that in
any particular port their economies were scaled. Hence, it would be
for instance, very costly for the applicant to move
fewer containers
in a less busy port than to move far more containers in a much busier
port. Bearing in mind this differentiation
the applicant had quoted
prices per port within a particular band. Yet it was then possible,
on the basis of the allocation of
volumes on a national basis, that
the applicant would not actually get the expected number of
containers within a particular band
in a particular port.
[32]
Mr
Stewart
recalled
that it was only after the “preferred tenderers” (per
port) were approved by the Divisional Acquisition Council
(“the
DAC”) that the “post-tender negotiations” would be
undertaken “with a view to negotiating and
finalising the terms
and conditions of the proposed Stevedoring Agreement”
27
.
According to the applicant, it was clearly envisaged in the RFP, and
accepted by the applicant, that by virtue of the points it
was
awarded under the preference points system the applicant was chosen,
in terms of the first respondent’s letter of 5 August
2010, as
the “preferred supplier” in respect of the ports of
Durban, Cape Town, Port Elizabeth and Ngqura. Hence, to
the applicant
it made a mockery of the PPPFA’s points system when it
transpired that there were other several preferred tenderers
per port
who were invited for the post-tender negotiations.
[33]
According to the applicant the adjudication of the tender process was
“neither fair, nor equitable, nor transparent,
nor
competitive”
28
.
The impugned decision was therefore unlawful for violation of section
217(1) of the Constitution and section 2(1) of the PPPFA.
Mr
du
Plessis
(after
he took over from Mr
Stewart
,
as explained earlier) pointed out that the issue here was not just
about whether or not the applicant suffered any prejudice as
a
consequence of the volume allocation process having been determined
on a national, instead of per
port,
basis but that the issue was one of legality. He argued that the
impugned decision was reviewable in terms of section 6(2)
of the
Promotion of Administrative Justice Act,
29
(“PAJA”)
on the ground that the decision was an “administrative action”
which was procedurally unfair and
also both unlawful and
unconstitutional, as alluded to above. On this basis, Counsel
submitted that the impugned decision ought
to be set aside and that
the court did not have any discretion to exercise in this regard.
[34]
Mr
du Plessis
further
pointed out that the first respondent had undertaken that there would
be no “horse-trading” with any tenderers
and further
outlawed “changes or purported changes by the Tenderer to the
Tender prices”
30
.
However, Counsel submitted, it appeared that such horse-trading had
in fact occurred during the post-tender negotiations when
the first
respondent impressed on the preferred tenderers, including the
applicant, to reduce their prices. It was after this “horse-trading”

that the first respondent finally decided on the allocation of the
volumes.
[35] Mr
du Plessis
sought to explain that the
reason for the applicant having received the most volumes (despite
its apparent mediocre performance
in terms of the score sheets) was
because the other preferred tenderers, who would otherwise have got
more work than the applicant
within certain bands, were lacking in
capacity. Hence, the volume of work allocated to those tenderers was
the maximum load that
they could handle. On this basis, counsel
submitted, it could not be said that the higher allocation of volumes
for the applicant
was as a result of any favouritism towards the
applicant.
[36] It was alleged in the first respondent’s
answering papers that after the preferred tenderers were advised that
they were
successful with their respective tenders the first
respondent set upon scheduling a meeting for the holding of
post-tender negotiations
with the said tenderers in accordance with
prescriptions of the PPM and the RFP. However, the first respondent
conceded that the
allocation of work was not determined in accordance
with the model used previously in awarding the first contract (“the
old
model”). What happened was that after the conclusion of the
post-tender negotiations but before the Stevedoring Agreement
was
signed, an official of the first respondent, one Mr John Frederick
Hyde, who was then the first respondent’s National
Operations
Planning Manager: Container Terminals, set about designing a new
model for the allocation of work.
[37] The old model included the
stevedoring company called Port Services (Pty) Ltd (“Port
Services”) which originally
participated in the second tender
(the RFP) but withdrew before its conclusion. Mr Hyde used the old
model as a first draft and
then allocated
Port
Services’s volumes to the only new entrant amongst the
preferred tenderers, namely, the eighth respondent.
[38] The first draft was depicted in Annexure “G”
to the affidavit of Ms Amanda Van Vuuren, (referred to earlier), the

first respondent’s Commodity Manager : Procurement.
31
According to Mr Hyde, the first draft did not take into
account the ranking of the respective preferred tenderers, their
capacity
and, most importantly, their prices, as the first respondent
was required to do in terms of the RFP, which stipulated that:
“
The recommendation for award (of business)
will be based on:
completeness of the
tender submission;
results of the
physical site evaluation;
financial status of
Tenderer;
previous
experience/history it may have had with Transnet and/or TPT;
minimizing risk to
the TPT operations; and
competitive
pricing”
32
[39] As a result, Mr Hyde reworked the first draft to
take such factors into account and formulated the new model. It was
this new
model which was embodied in annexure H. The schedules
hereunder (part of annexure H) show how the allocation of volumes
amongst
the various stevedores (the preferred tenderers) was done in
respect of the port of Durban in terms of the new model which the
first respondent applied. In the schedules the applicant is reflected
as “SACS”. It is also noted in the schedules that
the
applicant’s quoted price rate of R37,31 (see page 514 of the
Record) is reduced to R36,37 - an adjustment that was made
by the
applicant after attending the post-tender negotiations held on 19
August 2010, as discussed earlier.
Durban
Stevedore
Price
Allocation
Total Cost
Thekwini
R 34.50
95,364
R 3,290,058.00
Rainbow
R 32.50
93,372
R 3,034,590.00
DP World
R 30.00
452,396
R 13,571,880.00
Pace
R 34.95
330,780
R 11,560,761.00
Greystone
R 30.70
407,586
R 12,512,890.20
SACS
R 36.37
489,113
R 17,789,039.81
Total
1,868,611
R 61,759,219.01
(The
next schedule applied to the stevedores in the same order as above)
Durban
Est Ship Gear Volume
Ship Gear Cost
Price Gantry
Price Ship Gear
Volume (0,1%)
Cost
R 34.50
R 91.50
477
R 43,645.50
R 32.50
R 105.00
466
R 48,930.00
R 30.00
R 60.00
2,261
R 135,660.00
R 34.95
R 110.00
1,654
R 181,940.00
R 30.70
R 87.40
2,038
R 178,121.20
R 36.37
R 97.52
2,446
R 238,533.92
Ave
R 33.17
R 91.90
9,342
826,831
[40] In his affidavit, Mr Hyde alleged that the new
model constituted a fair and rational basis to allocate the volumes
of work
amongst the preferred tenderers. He pointed out that in
devising the new model, which was done after the post-tender
negotiations,
he had borne in mind the following:
That as a general
rule, only one stevedoring company should attend a line service.
This was for reasons of efficiency and it
also facilitated the
stevedores concerned getting to know the characteristics of the
vessels used in a particular line service;
That one also had
to consider whether a particular stevedoring company had the
necessary resources (mainly skilled and semi-skilled
manpower) to
service a complete line service. In other words, it was on an “all
or nothing” basis.
That, more
importantly, however, the system had to be cost- effective, taking
into account what the first respondent received
from the shipping
line companies for the stevedoring services rendered. To this end,
therefore, the first respondent did its
best to ensure that it
allocated the largest amount of work to the lowest tenderer,
subject to (40.1) and (40.2) above.
[41] Mr Hyde said that he believed that the new model
(annexure H) was the most effective method of ensuring a satisfactory
and
cost-efficient system of stevedoring services in the various
South African ports. He further pointed out that whilst the applicant

might have lost a number of shipping line services in Durban, it had
gained more than half of the business in the Port of Ngqura,
which
port was projected to experience the most significant growth during
the Stevedore Agreement. Further, that the applicant
was not the only
service provider which had been allocated reduced volumes based on
the price it tendered. For example, the seventh
respondent, under the
previous contract, handled approximately 441 000 containers per
annum. However, based on the price which
the seventh respondent had
tendered, it was estimated that under the new contract it would
handle only 330 000 containers
per annum.
[42] In her affidavit Ms Van Vuuren
sought to explain that
the purpose of post-tender negotiations
was not to identify which of the preferred tenderers would receive
orders from the first
respondent for the carrying out of stevedoring
services. On the contrary, they were all successful tenderers and
were all going
to receive work. The purpose of the post-tender
negotiations was to try and render the procurement of these services
more cost-effective
for the first respondent.
[43] Ms Van Vuuren stressed that the actual allocation
of work was only determined after the post-tender negotiations. The
allocations
were dependent upon a number of factors, the two main
ones being (1) the price tendered by each preferred tenderer and (2)
the
resources available to the tenderer concerned to carry out the
stevedoring services. In other words, all other things being equal,

the lower the price tendered by a preferred tenderer, the more work
such tenderer would be allocated, up to the limit of the resources

available to it, to enable it to render such services.
[44] She further pointed out that if the first
respondent gave favourable allocation of volumes to the applicant, as
the applicant
demanded, that would adversely affect the volumes
allocated the fourth, sixth, seventh and the eighth respondents (the
third respondent
having been unsuccessful in the tender). This in
turn would result in the first respondent acting unfairly towards to
the other
preferred tenderers, especially those who had ranked higher
than the applicant in the score sheets. She recalled that the
applicant
was ranked fifth amongst the preferred tenderers.
[45]
It was submitted on behalf of the first respondent that the first
respondent complied with the provisions of section 217(1)
of the
Constitution, section 51(1)(a)(iii) of the Public Finance Management
Act,
33
(“the
PFMA”) and section 2(1) of the PPPFA. Counsel further submitted
that the fact of the tender process having been
dealt with nationally
did not cause any prejudice to the applicant because, after all, it
was the applicant which received the
largest allocation of volumes
despite having scored less points than some other preferred
tenderers.
[46] In
Shidiack v Union
Government (Minister of the Interior)
34
the court emphasised that it would not interfere with
the discretion of a public official which had been
bona
fide
expressed, and duly and honestly applied
to the issue within the public official’s discretion, even if
the court considered
the decision to be wrong. It also added that in
such an instance no appeal or review will lie against the decision.
[47] Recently in
Pharmaceutical
Manufacturers
case
35
the court stated as follows:
“
What the Constitution requires is that
public power vested in the Executive and other functionaries be
exercised in an objectively
rational manner …
Rationality in this sense is a minimum threshold requirement
applicable to the exercise of all public power by members of the
Executive and other functionaries. Action that fails to pass this
threshold is inconsistent with the requirements of our Constitution

and therefore unlawful. The setting of this standard does not mean
that the courts can or should substitute their opinions as to
what is
appropriate for the opinions of those in whom the power has been
vested. As long as the purpose sought to be achieved by
the exercise
of public power is within the authority of the functionary, and as
long as the functionary's decision, viewed objectively,
is rational,
a Court cannot interfere with the decision simply because it
disagrees with it or considers that the power was exercised

inappropriately.”
36
[48] Therefore, the court recognises that, as an organ
of state,
37
the first respondent served as a public functionary
vested with public power to exercise in the fulfilment of a public
duty assigned
to it by statute through its mother company, the
state-owned Transnet Limited
38
,
and that, amongst others, contracting for goods and services as
envisaged in the RFP in the present instance, was a statutory

obligation.
[49] The purpose of a tender process was described in
Cash Paymaster Services (Pty) Ltd v Eastern
Cape Province & Others
39
as follows:
“
Tender procedures, as we have come to know
them over many years, have been the result of vast experience gained
in the procuring
of services and goods by government. They have
evolved over a long period of time through trial and error and have
crystallised
into a procedure that has become vital to the very
essence of effective government procurement. Strict rules have
developed over
the years in order to ensure that the system works
effectively. The very essence of tender procedures may well be
described as
a procedure intended to ensure that government, before
it procures goods or services, or enters into contracts for the
procurement
thereof, is assured that a proper evaluation is done of
what is available, at what price and whether or not that which is
procured
serves the purposes for which it is intended.”
[50] Originally the first respondent
sought to contest the applicant’s averment that the first
respondent was an organ of
state, as envisaged in the PPPFA.
40
However, this point was subsequently
conceded by the first respondent.
Indeed,
it is clear that the definition of “organ of state” in
the Constitution includes an entity such as the first
respondent. An
organ of state is defined as:
“
(a) any department of state or
administration in the national, provincial or local sphere of
government; or
(b) any other functionary or institution –
(i) exercising a power or performing a function in terms of the
Constitution or a provincial constitution; or
(ii) exercising a power or performing a function in terms of any
legislation.”
41
[51] Notwithstanding the concession
that the first respondent was indeed an organ of state, Mr
Pammenter
strenuously argued that
the
provisions of the PPPFA did not necessarily apply to the RFP, despite
there being some reference to the PPPFA in the RFP.
42
He contended that reference to the
PPPFA was for the limited purpose of allowing a “preference”
as defined in the PPPFA
for the purposes of BBBEE and that such
reference did not entail the incorporation of the entire provisions
of the PPPFA (and the
Regulations made thereunder) into the tender
process.
[52] Section 217 of the Constitution provides:
“
(1) When an organ of state in the national,
provincial or local sphere of government, or any other institution
identified in national
legislation, contracts for goods or services,
it must do so in accordance with a system which is fair, equitable,
transparent,
competitive and cost-effective.
(2) Subsection (1) does not prevent the organs of state or
institutions referred to in that subsection from implementing a
procurement
policy providing for -
(a) categories of preference in the allocation of contracts;
and
(b) the protection or advancement of persons, or categories of
persons, disadvantaged by unfair discrimination.
(3) National legislation must prescribe a framework within which the
policy referred to in subsection (2) must be implemented.”
[53] Pursuant to section 217(3) of
the Constitution, Parliament promulgated the PPPFA, which
defines
an organ of state as being -
“
(a) a national or provincial department as
defined in the Public Finance Management Act, 1999 (Act No. 1 of
1999):
(b) a municipality as contemplated in the Constitution;
(c) a constitutional institution defined in the Public Finance
Management Act, 1999 (Act No. 1 of 1999);
(d) Parliament;
(e) a provincial legislature;
(f) any other institution or category of
institutions included in the definition of “organ of state”
in section 239
of the Constitution and recognised by the Minister by
notice in the
Government Gazette
as an institution or category of institutions to
which this Act applies.”
43
[54] Section 2(1) of the PPPFA provides, in part, as
follows:
“
(1) An organ of state must determine its
preferential procurement policy and implement it within the following
framework:
A preference point system must be followed;
…
the specific goals may include –
contracting with persons, or categories of persons, historically
disadvantaged by unfair discrimination on the basis of race,
gender
or disability;
implementing the programmes of the Reconstruction and Development
Programme as published in
Government Gazette
No. 16085 dated
23 November 1994;
(e) any specific goal for which a point may be awarded, must be
clearly specified in the invitation to submit a tender;
(f) the contract must be awarded to the tenderer who scores the
highest points, unless objective criteria in addition to those
contemplated in paragraphs (d) and (e) justify the award to another
tenderer; …”
[55] In line with the dictates of section 217(1) of the
Constitution, the PFMA provides, in part, as follows:
“
(1) An accounting authority for a public
entity -
(a) must ensure that that public entity has and maintains –
effective, efficient and transparent systems of financial
and risk management and internal control;
(ii) …
(iii) an appropriate procurement and provisioning system which is
fair, equitable, transparent, competitive and cost-effective;
(iv) a system for properly evaluating all major
capital projects prior to a final decision on the project;
44
[56] I do not agree with Mr
Pammenter’s
submission that the provisions of the
PPPFA were not applicable in the present case. In terms of the RFP,
after the first respondent
had committed itself to endorsing and
supporting the Government’s BBBEE’s programme and to
doing business with local
business enterprises who shared the same
values, the first respondent proceeded and made this firm
undertaking: “TPT will
accordingly allow a ‘preference’
in accordance with the 10% preference system, as per the
Preferential
Procurement Policy Framework Act (as
amended) …”
45
This was a direct reference to the
PPPFA contained in the RFP, as well as in the PPM
46
.
However, it was not the only reference. For instance, one of the
undertakings which the first respondent appeared to have made,
in
terms of the Notes, was the following: “The adjudication will
be based on the following criteria with the weighted averages
of
Price 50, Technical 40 and BBBEE 10”
47
,
and the RFP, yet again stressed: “Price will count for 50
points, Technical 40 points and BBBEE 10 points.”
48
To my mind, there was no clearer
indication on the part of the first respondent of its intention to
have the provisions of the PPPFA
applicable in this tender process.
[57] In any event, it does not appear to me to be a
prerequisite that a special clause should be included in a tender
document whereby
an organ of state is subjected to the provisions of
the PPPFA when contracting for goods or services. It seems to me this
is a
constitutional imperative in terms of the provisions of section
217 of the Constitution, read with section 2(1) of the PPPFA. There

appears to be no indication either in the Constitution or the PPPFA
that the application of the PPPFA in a public tender would
always
have to be subject to an empowering clause located in the tender
document or elsewhere. Therefore, the position should,
in my opinion,
be that the provisions of the PPPFA are attracted in a tender process
immediately once it is established that an
institution or entity
which is an organ of state is inviting for tender to contract for
goods or services. To my mind, this is
what both the Constitution and
the Legislature seem to have intended in this regard. I am therefore
satisfied that the provisions
of the PPPFA were applicable in the
present tender dispute. The issue to determine now is whether or not
the impugned decision
is inconsistent with those provisions.
[58] Counsel further submitted that the applicant, on
its own case, was advised in writing of the impugned decision on 30
August
2010. By concluding the Stevedoring Agreement with the first
respondent on 1 September 2010 (when it was already aware of the
impugned
decision) the applicant thereby made its election and its
action was consistent with an intention on its part to render the
stevedoring
services in accordance with the impugned decision. He
pointed out that the applicant only lodged the complaint some two
weeks later
when it addressed a letter to the first respondent on 14
September 2010. In the circumstances, Counsel submitted that the
applicant
had perempted its right to seek a review and setting aside
of the impugned decision.
[59] The applicant denied that it had perempted its
right to the review. Mr
du Plessis
argued that peremption applied only where, by its
action, a party unequivocally indicated that it was not going to take
any step
in a matter in question. He pointed out that the Stevedoring
Agreement was only forwarded to the applicant the day before the
Agreement
was due to be in force. In the circumstances, the applicant
simply signed the Stevedoring Agreement because it was financially
prudent to so. This was not, counsel submitted, an unequivocal
abandonment of its rights on the part of the applicant. Referring
to
the decision in
Clarke v Bethal Co-operative
Society,
49
he further submitted that the courts should not lightly
take away litigants’ right to litigate.
[60] There seems not to be a clear position on the issue
of whether the doctrine of peremption (or acquiescence, as it is
sometimes
called) may apply to a situation, such as the present,
where the decision allegedly acquiesced in is not a judgment or order
of
a court of law but an administrative decision. The first
respondent alleges that the applicant perempted its right to have the
impugned decision (which is an administrative decision) reviewed and
set aside. The following decisions illustrate how the courts
have
remarked about the doctrine:
[61] In
Hlastwayo v Mare and
Deas
50
the court described the doctrine as follows:
51
“
. . . [I]t would seem that to constitute
acquiescence there must be consent either in act or word. A person
has the right to re-open
the case or to appeal; he voluntarily
chooses to do an act which is clearly inconsistent with this right,
and he is therefore presumed
to have consented to the judgment. . .
At bottom the doctrine is based upon the application of the principle
that no person can
be allowed to take up two positions inconsistent
with one another, or as is commonly expressed to blow hot and cold,
to approbate
and reprobate.”
[62] The doctrine was again dealt with in
Dabner
v SAR&H
52
where the court stated the following:
53
“
If the conduct of an unsuccessful litigant
is such as to point indubitably and necessarily to the conclusion
that he does not intend
to attack the judgment, then he is held to
have acquiesced in it. But the conduct relied upon must be
unequivocal and must be inconsistent
with any intention to appeal.
And the
onus
of
establishing that position is upon the party alleging it. In doubtful
cases acquiescence, like waiver, must be held non-proven.”
[63] In
Gentiruco AG v Firestone
SA (Pty) Ltd
54
the court put it thus:
55
‘
The right of an unsuccessful litigant to
appeal against an adverse judgment or order is said to be perempted
if he, by unequivocal
conduct inconsistent with an intention to
appeal, shows that he acquiesces in the judgment or order. . .
Conceivably such acquiescence
may occur, albeit rarely, before the
judgment or order is actually given against him, as, for example,
where he expressly or impliedly
agrees in advance to be bound by it.
[64] In
Blou v Lampert &
Chipkin NNO
and others
56
the court stated the following:
57
“
[A]s I understand the position the
principle of peremption does not apply to the grounds of appeal but
to the judgment itself. It
is in the authorities dealt with on the
basis of an acquiescence in the judgment and the rule with regard
thereto is well settled.
If the conduct of an unsuccessful litigant
is such as to point indubitably and necessarily to the conclusion
that he does not intend
to attack the judgment, then he is held to
have acquiesced in it. The conduct relied upon must be unequivocal
and must be inconsistent
with an intention to appeal and the onus of
establishing that position is upon the party alleging it. . . It
seems to follow that
all this relates to the conduct of the
unsuccessful litigant after judgment was entered against him and not
to his conduct before
judgment.”
[65] It is clear from the Appellate Division’s
decision in
Gentiruco, supra,
that,
albeit rarely, the doctrine may apply even before judgment or order
is given in certain circumstances.
However, it
does not appear to me that the doctrine can apply in respect of an
administrative decision made by any institution or
entity (including
an organ of state), other than a court of law. On this basis alone, I
would have been inclined to dismiss the
first respondent’s
submission. In any event, I am satisfied that this was a situation
that when the applicant concluded the
Stevedoring Agreement with the
first respondent on or about 1 September 2010 the applicant did so
under protest. The impugned decision
had been brought to the
attention of the applicant virtually on the eve of the commencement
date of the Stevedoring Agreement.
Clearly, if the applicant had
decided not to sign the Stevedoring Agreement it would have lost even
the reduced volumes that were
allocated to it and that could possibly
have led to much bigger problems for the applicant. The applicant’s
right of access
to the court should be respected
58
.
The defence of peremption raised by the first respondent can
therefore not succeed.
[66] The applicant’s concern
about the potential enforced retrenchment of a substantial
proportionate percentage of its workforce,
which allegedly would
mostly affect its long-serving staff was, with respect, of no
substance because, as Mr
Pammenter
correctly
contended, the RFP envisaged that the workers’ positions would
be protected under the provisions of section 197
of the Labour
Relations Act.
59
In this regard I recall the relevant
provisions in the RFP:
“
14.11 Tenderers acknowledge and agree that
if they are awarded the Tender and, subsequently, the business then
that will constitute
a transfer of business to the successful
Tenderer(s) in terms of section 197 of the Labour Relations Act No.66
of 1995 (“LRA”),
as a consequence of which the successful
Tenderer(s) may acquire the incumbent employees who were engaged in
providing the Stevedoring
Services to TPT.
14.12 To the extent necessary, the successful Tenderer(s) will:
14.12.1 assume liability for the payments referred to in section
197(7) of the LRA (refer to relevant clauses in the attached draft

Agreement);
14.12.2 indemnify TPT and hold it harmless in
respect of all claims of whatever nature and howsoever arising, which
may be made
against TPT by one or more of the predecessor’s
employees.”
60
[67] It would appear to me, therefore, that the
applicant’s concern on this aspect was merely a self-serving
submission and
not something of a real threat to its current
workforce, as the applicant claimed.
[68] It is common cause that the
applicant did not tender on the lowest band (namely, the 0–39 999
container moves category),
but quoted only from 40 000–99 999
(except in respect of Durban), 100 000–299 999 and 300 000–700
000 container
moves per annum. According to the score sheets the
applicant fared as follows in respect of the mentioned ports and
bands
61
:
68.1
DURBAN
(1)
100 000-299 999 CONTAINER MOVES
Out of seven eligible competitors, the applicant was
ranked fifth behind Rainbow Marine (fourth respondent), Thekweni
Marine (eighth
respondent), DP World (sixth respondent) and
Greystones (fifth respondent). The applicant’s tendered price
was the third
highest, only behind Port Services (third respondent)
and Pace (seventh respondent), respectively in their ranking order.
(2)
300 000-700 000 CONTAINER MOVES
The same seven tenderers, as above, competed under this
category. The applicant was again placed in the fifth position behind
the
fourth, sixth, eighth and fifth respondents, respectively in
their ranking order. Again the applicant’s price was the third

highest behind the third and seventh respondents.
68.2
CAPE TOWN
(1)
40 000-99 999 CONTAINER MOVES
The applicant competed with three other tenderers –
that is, they were four in all. Under this category the applicant was
ranked first, having scored the highest points, but quoted the second
lowest price behind the fifth respondent.
(2)
100 000-299 999 CONTAINER MOVES
The same four tenderers, including the applicant,
contested in this category. The applicant was ranked second behind
the sixth respondent.
The applicant quoted the second highest price
behind the third respondent.
(3)
300 000-700 000 CONTAINER MOVES
Precisely the same position as in (2) above, obtained in
relation to the applicant under this category.
68.3
PORT ELIZABETH AND NGQURA
(1)
40 000-99 999 CONTAINER MOVES
There were three eligible competitors, including the
applicant, in this band. The applicant was ranked last, with the
highest price
quoted.
(2)
100 000-299 999 CONTAINER MOVES
From the same three competitors, as above, the applicant
was ranked second - albeit with the highest price.
68.4 It is also noted that in respect of the DURBAN port
the applicant scored the second highest points (9.5 out of 10) behind
the
fourth and eighth respondents who each obtained 10 out of 10, for
BBBEE. The applicant was tied with the seventh respondent.
[69] In the present instance the
point scoring was conducted on the basis of the aggregate
consideration of various factors which,
in my view, were not
inconsistent with the spirit and tenor of the PPPFA. These factors
were compartmentalised under the following
headings or columns:
Financial Offer (i.e. Price); Comparative Offer; Technical (maximum
score 40); Points for Financial Offer
(maximum
50); BBBEE Level of
Contribution
(Level 1 to 9); BBBEE (Points out of 10) and Total Points out of 100.
The last column was the ultimate Ranking of the
candidate (tenderer)
vis-à-vis
its competitors. Clearly, these
factors were what section 2(1) of the PPPFA envisaged
[70] The applicant sought to rely on
the provisions of section 2(1)(f) of the PPPFA which stipulate that
“the contract must
be awarded to the tenderer who scores the
highest points, unless objective criteria in addition to those
contemplated in paragraphs
(d) and (e) justify the award to another
tenderer”. However, the above score sheets do not completely
favour the applicant.
In particular, the score sheets clearly
illustrated that the applicant was not the best performer in respect
of the Durban port
in the 300 000–700 000 band, even under
the BBBEE consideration.
62
[71] Indeed, in many instances, the other preferred
tenderers performed better than the applicant particularly on price
rates. On
this particular point it is important to refer to the RFP
under
“
Evaluation Criteria – Critical
Success Factors” where it is stated: “Please note that
pricing is not the sole
determining factor for consideration.
However, competitive pricing is critical.
”
63
(Emphasis added). As stated earlier, the first
respondent conceded that the allocation of work was determined upon a
number of factors,
mainly (1) the price tendered by each preferred
tenderer and (2) the capacity of the tenderer concerned to carry out
the stevedoring
services.
64
[72] The concept of post-tender negotiations is not
uncommon in public tender dealings and has been found to be a legally
acceptable
practice as long as, it seems to me, it is included in the
tender document as a requirement in the tender process. In
Mhonko’s
Waste and Security Services CC & Others CC v Transnet Ltd
65
the court stated:
‘
once the decision was made with respect to
who the successful candidates were Transnet was entitled to negotiate
the prices with
them as this was part of the agreement between the
parties, as contained . . . in the tender document.’
66
[73] If an organ of state wishes to engage in
negotiations in a tender process it does not appear that it is
required to do so before
short-listing, or even before the tender is
finally awarded. In
Roy Ramdaw Incorporated v
Amajuba District Municipality & Others
67
the tender process involved three stages. At the first
stage tenders were invited; at the second, tenderers were
short-listed, and
then at the third stage, a successful tenderer was
chosen and only then that the negotiations were entered into. In that
case the
court described this last stage during which the
negotiations took place as purely commercial in nature and not an
administrative
process that engaged the interests of the appellant,
who was a short-listed, but unsuccessful, tenderer.
68
The third stage would then represent the stage of the
post-tender negotiations in the present case.
[74] It is unclear to me why the proposed distribution
of volumes among several stevedoring companies, in terms of the
Notes, should
have come as a surprise to the applicant at the
post-tender negotiations. It was not unlawful or improper for the
first respondent
to divide the volumes amongst the several tenderers.
The PPM, which was the first respondent’s procurement policy
framework
document, compiled in compliance with the PPPFA, stipulated
as follows:
“
When it is considered in Transnet’s
best interest to divide the total requirement of a tender between two
or more tenderers
(e.g. in order to draw from the most convenient or
nearest source, or to ensure continued competition or to optimise
available
resources or to support a BEE Company) a supply or service
may be divided amongst several tenderers, and contracts can be placed

accordingly, provided that this was a tender condition. The total
value of the business to be awarded, and not the individual
contracts, will however determine whether such tender falls within
the (Acquisition Council’s) AC’s jurisdiction or
not.
Once approval for the award of the business has been obtained from
the AC, the individual contracts may be signed by the person
with
necessary contractual powers for the individual contracts.”
69
[75] Therefore, clause 6.12 of the PPM was the
empowering provision in terms of which the first respondent announced
more than once
in the RFP about its intention to allocate the volumes
to more than one preferred stevedore at each port. I can refer to a
few
further examples in this regard:
“
TPT intends to sub-contract the stevedoring
services to more than one (1) stevedore per port to perform the
stevedore services for
a period of two (2) years, with an option to
extend for a further one (1) year (in favour of TPT which may be
exercised by TPT
within its sole and unfettered discretion).”
70
And,
“
Without limitation to TPT’s rights
elsewhere contained herein, and in addition thereto, TPT may
accordingly in its sole and
unfettered discretion, split the award of
the business to more than one stevedore in the proportions that TPT
deems fit, in its
sole and unfettered discretion”
71
[76] Indeed, the applicant’s ostensible belief
that it was the only preferred tenderer (or supplier) and was
surprised at
the post-tender negotiations to discover that it was
not, appeared in its founding papers, where the applicant alleged as
follows:
“
The fundamental difficulty with TPT’s
process was that it included the mandatory and objective PPPFA points
system which is
designed to identify the single tenderer with the
most points and to whom the tender “
must
”
then be awarded “unless objective criteria [other than price,
technical and BBBEE] justify the award to another tenderer”
(s
2(1)(f) of the PPPFA), yet it also envisaged several tenderers
qualifying for post-tender negotiations “on various issues
and
once the negotiations have been completed, TPT will allocate the
volumes and lines”
72
[77] To my mind, the fact that section 2(1)(f) of the
PPPFA refers to “the tenderer” (in singular) does not in
any way
imply a legislative intention that at all times the award of
contract, under the PPPFA, should be restricted only to a single
tenderer
even where the tender document clearly reflected the
contrary intention. The Interpretation Act, 1957 provides, amongst
others:
“
In every law, unless the contrary intention
appears –
(a) …
(b) words in the singular number include the plural, and words in the
plural number include the singular.”
73
[78] Therefore, it ought not to have taken the applicant
by any surprise to realise, during the post-tender negotiations, that
it
was not the only preferred tenderer for the provision of
stevedoring services at the ports in question.
[79] Further, the provision (in the Notes) that “[t]here
is no guarantee
on volumes”
was
also consistent with the terms of the RFP which clearly stipulated:
“
TPT does not guarantee volumes of containers to
be moved.”
74
[80] Therefore, the matters dealt with in paragraph 4 of
the Notes are, in my view, not entirely inconsistent with, but
somewhat
complementary to, the “Principles for Awarding
Business” in terms of the RFP.
[81] It is clear that the advertisement in the RFP gave
the indication that the consideration of the tenders and allocation
of volumes
would be done on a per port basis. The first respondent
did not, however, follow its undertaking in this regard, but instead
the
first respondent conducted the process on a national basis. For
this, the tender process was procedurally flawed to the extent of

that irregularity. However, the court has to determine whether, on
the consideration of all relevant factors, the irregularity
was such
as to warrant that the impugned decision be reviewed and set aside.
[82] In its argument counsel for the applicant also
relied on the decision in
Premier, Free State
& Others v Firechem Free State (Pty) Ltd
75
and in particular where the court, in that case, stated
that one of the requirements of a tender procedure was “that a
tender
should speak for itself. Its real import may not be tucked
away, apart from its terms”
.
76
On this point, counsel submitted that the “Principles
for Awarding Business” in terms of the RFP
77
were materially different from what was contained in the
Notes under the heading “Allocation of Work”
78
.
He further contended that, indeed, the terms of the
contract which was eventually concluded between the applicant and the
first
respondent materially differed from what the RFP envisaged on
the issue of allocation of volumes. On this basis, counsel submitted

that the principle in
Firechem
should,
therefore,
be applied.
[83] Section 2 clause 7 of the RFP under the heading
“Principles for Awarding Business” (“the
Principles”)
provided the following:
“
7.1 As indicated in clause 6.4 Phase 5
above, TPT shall enter into post-tender negotiations with the
preferred Tenderers.
As is elsewhere also provided in the Tender, Tenderers are
advised and should note that any final award of business is
entirely conditional upon and subject to the successful conclusion of
a written contract between the preferred Tenderer(s) and
TPT, which
contract will include such terms and conditions as TPT Management and
the DAC may require or prescribe, but which shall
have its foundation
in the attached Proposed Stevedoring Services Agreement (see Section
11 of the Tender)
The recommendation for award will be based on:
completeness of the Tender submission;
results of physical site evaluation;
financial status of Tenderer;
previous experience/history it may have had with Transnet and/or
TPT;
minimising risk to the TPT operations; and
competitive pricing.
The Tenderer must be in a position to commence providing the
Stevedoring Services within one month after receipt of written

notification to this effect from TPT.”
[84] On the other hand, paragraph 4 of the Notes under
the heading “Allocation of Work” contained, amongst
others, the
following:
“
Given the nature and volume of business
through the Container Terminals, TPT has estimated in terms of its
operational requirements
the most appropriate number of stevedores to
be appointed per region.
The regions have been determined as follows:
Region 1
– Durban Container Terminal and Pier 1
Container Terminal = 63 Line Services with an estimated annual
container volume of
1,700,000. Propose 6 or 7 stevedores.
Region 2
– Port Elizabeth and Ngqura Container Terminals
= 16 Line Services with an estimated annual container volume of
214,000.
Propose 3 stevedores,
Region 3
– Cape Town Container Terminal and Diversions
from CTCT to Cape Town MPT due to construction at CTCT = 26 Line
Services and
an estimated annual container volume of 586,000. Propose
4 stevedores.
The award to the proposed number of Stevedores in this model is
obviously only possible if there are sufficient suitably qualified

companies that submit tenders.
The grouping of Line Services to make up the allocated volume will be
determined by TPT.
The Stevedoring Company will carry the risk of changes in estimated
volumes due to growth, mergers, disinvestments etc. i.e. There
is no
guarantee on volumes.
process, the Line Services will be allocated to each successful
tenderer based on the band of containers that they have been
successful
for in their tender. Factors that will be taken into
account when this allocation is done are:
The number of gantries that the company can man at any given time in
the region.
The schedule of the vessels of the Line Services allocated.
The expected volumes from each Line Service to make up sufficient
volume for the band allocated.”
[85] In
Firechem, supra,
the
court had to deal with a tender procedure in relation to the supply
of cleaning material to a provincial government. The tender
document
contained a term that was materially different to that of the
contract which was ultimately concluded, in that the former
provided
that the provincial government would determine from time to time the
quantity of supplies that it would need, whereas
the latter provided
for a fixed quantity of supplies which would be delivered to the
provincial government which, in turn, was
then obliged to take
delivery of. It would appear that in
Firechem
the court intended, among other things, to emphasise the
importance of competitiveness in a tender procedure,
79
when the court stated “that a tender should speak
for itself and its real import may not be tucked away, apart from its
terms”.
In other words, the tender process must be devoid of
deception or underhandedness.
[86]
Further, it is noted that in
Firechem
the
two documents (namely, the written tender and the contract) were
clearly at variance in a material respect and, therefore, spoke

directly to a material term of the contract, namely, the volume of
supplies to be provided and how that volume was to be determined.
In
the present instance counsel for the applicant pointed out the
factual situation that different ports had different volumes of
work
in that some ports were busier than others. I do not doubt the
veracity of this assertion.
[87] Counsel further submitted that had the applicant
known that the allocation of work would not be determined on a per
port basis,
but on a combined basis, the applicant would probably or
possibly have quoted its prices differently than it did. He opined
that
on a national allocation basis it was conceivable that there
could be a substantial amount of work in some ports and very little

in others. He pointed out that in any particular port their economies
were scaled. Hence, he submitted, it would be very costly
for the
applicant to move fewer containers in a less busy port than to move
far more containers in a much busier port. Bearing
in mind this
differentiation the applicant had quoted prices per port within a
particular band. Yet as the position stood, it was
possible that the
applicant would not actually get the number of containers which it
hoped to get within a particular band in a
particular port.
[88]
Indeed,
the applicant submitted its tender per port which, admittedly, was in
apparent compliance with the advertisement in the
RFP. It is common
cause that the applicant generally quoted different prices in respect
of different ports and within different
bands. It is also common
cause that the first respondent, when allocating the volumes, did not
apply the method that accorded with
the RFP advertisement, in that it
determined the allocation of work not on a per port basis, but on a
combined or national basis.
On this basis, it cannot be denied that
had the applicant known that the allocation of work would be
determined on a national basis
the applicant would have quoted in a
different way. As I have already found, the first respondent, by
designing the “new
model” (annexure H) for the allocation
of work after the process of submitting tenders was closed and
without notifying the
tenderers about it, thereby committed an
irregularity which rendered the tender process procedurally flawed to
the extent of that
irregularity.
[89]
Can it then be said that this procedural irregularity is of similar
status as in
Firechem’s
case?
In my view, the situation in
Firechem
was
such that the discrepancy between the tender document and the
contract on the item complained of, namely, the quantity of the

cleaning material to be supplied, had a clear direct bearing on the
material term of the contract. There was simply no conjecture
or
speculative thinking about the issue.
[90] However, in the present instance the position is
not necessarily the same. There was no evidence or suggestion that if
the
allocation of work was done on a per port basis the applicant
would have received more volumes than it actually received, which

would have satisfied the applicant. Indeed, this was not the
applicant’s case. The basis of the applicant’s complaint

was simply that had it known that the allocation of work would be
determined on a national basis it would probably or possibly
have
quoted its prices in a different way. It was, therefore, also
possible that the applicant would not necessarily have done
so.
[91] The applicant’s
observation that had it known about what would happen (namely, that
the allocation of work would be done
on a national basis) it would
have quoted prices differently may, it seems to me, tend to suggest
that in those ports where the
applicant knew that there were fewer
containers to move it would have quoted higher prices because,
according to the applicant,
it was more costly to undertake
stevedoring operations in that environment. It would have been
commercially imperative for the
applicant to compensate for the extra
operating expense. However, this is all speculation, which is induced
by the applicant’s
speculative submission on this aspect. The
bottom line, in my view, is that the facts in
Firechem
were
not on all fours with the facts in this case. The two cases are,
therefore, distinguishable.
[92] In any event, even if I am wrong with my finding in
the preceding paragraph, I would still find that the procedural
irregularity
committed by the first respondent was not of the nature
and extent as to warrant the review and setting aside of the impugned
decision.
Notwithstanding the first respondent irregularly using the
new model (annexure H) in the circumstances discussed above, the end

result saw the applicant getting more volumes than it actually
deserved in terms of that model, as well as in terms of the RFP,
the
PPM and the PPPFA, all of which referred to the highest points scorer
getting the upper hand in terms of work allocation, which
was not the
case with the applicant.
[93] As pointed out, in the port of Durban (in the 300
000–700 000 band) the applicant ranked fifth behind most
other
preferred tenderers. Even under the BBBEE consideration the
applicant was outshone by the fourth and eighth respondents. The fact

that the other preferred tenders were allocated volumes up to their
respective capacities was a factor which obviously played out
to the
applicant’s favour and advantage. This appeared to be common
cause. In my view, it is a factor which ought to be taken
regard of
in favour of the first respondent.
[94] It is also important noting or remembering that the
element of procedural fairness in any bilateral or multi-lateral
transaction
is something to be ensured to apply to both or all
parties, as the case may be, to the transaction, including (in a
similar matter
as the present) the party who issues the invitation to
tender. It cannot be disputed that the fourth to eighth respondents
are
innocent parties in this controversy. They stand to lose hugely,
financially or otherwise, if the impugned decision were to be set

aside, because an increase in the applicant’s volumes at this
stage would mean a decrease in their respective volumes.
[95] Therefore, any interference with the current
container handling operations at the South Africa’s harbours,
in the manner
envisaged in the relief sought, would, besides any
further adverse considerations (some of which are discussed below) be
doubtlessly
unduly unfair to the other respondents concerned.
T
he apparent adverse financial effect which the new
contract had on the applicant and its business did not necessarily
constitute
proof of any impropriety or procedural unfairness in
relation to the tender process, nor was it a sufficient ground for
review
of the impugned decision.
[96] I further consider that, although the first
respondent allocated work through a model other than the one apparent
in the RFP
advertisement, the model so applied, it would appear, was
reasonable and fair to all parties. More importantly, after all, that

method of allocation does not seem to me to be inconsistent or at
variance in context with the “Principles For Awarding Business”

referred to in section 2 clause 7.3 of the RFP. Instead, the method
appears to me to comply with the requirements set out in section

217(1) of the Constitution, read with section 2(1) of the PPPFA. I
further took into account the following observations.
[97] In evaluating tenders, an organ of state is
entitled to set up a benchmark. As was stated in
Mhonko’s
Waste
,
supra:
‘
It is [Transnet’s] right to determine
the benchmark and it is for them to decide when this would be done.
It could be done
before the close of tender and prospective
candidates advised thereof or after the tender is closed or towards
the very end of
the process: when it is done is not for this court to
prescribe, the decision is that of Transnet.’
80
[98] The court went on to explain that what it would be
concerned with is whether the benchmark itself is arbitrary or based
on
reasonable and rational considerations as to its determination and
whether its application of the benchmark is uniform.
[99] There can be no doubt that the issue of price is an
important factor when considering a tender, not only for the purposes
of
determining money actually spent, but also in determining whether
a tenderer is suitably aware of the market forces involved in
the
work being tendered for.
81
I would think that this factor was even more important
in a transaction involving a public tender, where the project
tendered for
was likely to cost the taxpayer enormous amounts of
money. Indeed the fact that in terms of the procurement policy
framework “price”
alone counted for 50 points (out of
100), in comparison to 10 points for “BBBEE” was, in my
view, substantive proof
of this conclusion.
[100] Therefore, the first respondent, as a commercial
entity and an organ of state, was, in my view, both entitled and
obliged
(from both the legal and constitutional perspective) to
obtain the fairest possible price it could when procuring goods and
services
through a tender process. In doing so, the first respondent
was entitled to set a benchmark against which the prospective
tenderers
would be compared.
[101] The use of the 50/40/10 formula was clearly such a
benchmark, used to determine whether the tenderers met the
requirements
of the first respondent’s needs, and in relation
to the prices that the tenderers charged. This benchmark was, in my
view,
in compliance with the RFP and the PPPFA, but never intended to
be the final determination of which tenderer would ultimately be

awarded the tender. It was rather a standard against which
prospective tenderers could be measured and short-listed.
[102] At the end of the day it was about how much the
first respondent would pay for the project (the tender) which amount
was how
much the successful tenderer(s) would be paid or receive. In
my opinion, therefore, the first respondent’s decision to focus

mainly on price and capacity to deliver at the stage of allocation of
volumes was not inconsistent with the aims and objects of
the RFP,
including the “Principles For Awarding Business”.
82
[103] Once the benchmark had been set, and a shortlist
of tenderers compiled, the first respondent was thereafter entitled
to enter
into commercial negotiations with each shortlisted preferred
tenderer, provided that the first respondent conducted itself fairly

and treated all tenderers equally at all times.
[104] I do not agree with the suggestion that the first
respondent abused the post-negotiation process to conduct
“horse-trading”
which the first respondent had undertaken
it would not do. Post-tender negotiations are an accepted feature of
a tender process,
and, in the present case, it was also a procedure
that was clearly envisaged in the RFP. There is nothing to suggest
that any one
tenderer was treated at an advantage over another during
these negotiations, or that any one tenderer had any kind of ‘inside

information’ that would put the tenderer concerned at an unfair
advantage over the others. At all times, the first respondent
was
open about the fact that it was negotiating with all the preferred
tenderers. In any event I agree with Mr
Pammenter
that there
is no reason why “commercial arm twisting” should not be
allowed in the procurement process and that it
must be borne in mind
that the purpose of section 217 is, subject to the affirmative action
issue, to ensure that the government
gets the best price and value
for which it pays.
[105] It has also been said it is not unfair for an
organ of state to set criteria in a tender, and not disclose the
weight to be
attached to each of these criteria, as this then
influenced tenderers to tender competitively.
83
However, where a tenderer were to receive information
which gave the tenderer concerned an advantage over other tenderers,
this
would render the process unfair.
84
It would also be unfair if there was any deception
present in the acceptance of a particular tenderer, as this strips
the process
of the fundamental aspect of fairness, namely, the
requirement that all tenderers should be treated and considered on an
equal
basis.
85
As was stated in
Metro Projects
CC:
“
Where subterfuge and deceit subvert the
essence of a tender process, participation in it is prejudicial to
every one of the competing
tenderers whether it stood a chance of
winning or not.”
86
[106] The RFP envisaged, in my view, that the
post-tender negotiations would be conducted on a one-on-one basis as
between the first
respondent and each preferred tenderer at a time,
particularly on the issue of price: “TPT reserves the right to
negotiate
final prices with the preferred Tenderers.”
87
Indeed, this clause, on its face, could appear to be
somewhat inconsistent with the further provision under the same
section which
stipulated: “Prices should not be subject to
variation, amendment or adjustment.”
88
It seems to me, however, that the latter clause related
to a unilateral action on the part of the tenderer at an earlier
stage of
the process before the negotiations, which was prohibited.
The former clause related to the negotiation stage, which was then
permissible.
In my opinion, there is therefore no conflict between
the two clauses.
[107] It is apparent that the primary issue that
dominated the post-tender negotiations was the issue of price rates.
There was
no suggestion that what the first respondent discussed with
one preferred tenderer during the negotiations was imparted to any
one of the other preferred tenderers. The discussions remained
confidential between the parties. Indeed, the first respondent
undertook
:
“
TPT
will not engage in “horse-trading” and will
not disclose the prices to any Tenderer. All financial and related
information
will be regarded as strictly confidential.”
89
There was no evidence or suggestion that the first
respondent breached this undertaking of confidentiality.
[108] According to the dictionary meaning
“horse-trading” means “hard and shrewd bargaining”
90
which, on its face, does not necessarily suggest or
imply any impropriety or
mala fides
.
However, it is evident that the concept of “horse-trading”
(as alleged in the present context) implied an ingenious
and cunning
ulterior motive on the part of the first respondent during the
negotiations. In my view, there was no evidence or even
suggestion
that the post-tender negotiations in the present instance amounted to
“horse-trading” in the context alleged,
on the part of
the first respondent. Nor was there any evidence, allegation or
suggestion that the negotiation process in particular
or the entire
tender process generally, was tainted with fraud, corruption or any
other reprehensible conduct.
[109] Significantly, like every other preferred
tenderer, the applicant was well aware as at the time it submitted
its tender that
there was a mandatory provision about the post-tender
negotiation process. To my mind, therefore, the negotiation process
did not
take away any one of the elements of fairness, equitability,
transparency, competitiveness and cost-effectiveness envisaged in
section 217(1) of the Constitution.
[110] An organ of state has discretion to accept or
reject a particular tender, but in exercising this discretion it must
act fairly,
responsibly, and honestly,
91
and in a manner that is procedurally fair.
92
Indeed, in terms of the RFP the first respondent
possessed this discretion: “Without limitation to TPT’s
rights elsewhere
contained herein, and in addition thereto, TPT may
accordingly in its sole and unfettered discretion … reject all
Tenders,
without assigning any reason therefor, or resolve not to
accept any Tender; …”.
93
[111] The court is also conferred with discretionary
power to grant a review application and set aside an impugned
decision. Indeed,
it has been held that tender processes do not
necessarily have to be perfect, and that not every slip in the
administration of
tenders has necessarily to be visited by judicial
sanction.
94
Hence, when it deems appropriate the court may decide,
in the exercise of its discretion, not to set aside an impugned
decision
even if it amounted to an invalid administrative act.
95
In
Oudekraal Estates (Pty) Ltd v
City of Cape Town
96
the court stated:
‘
. . . a court that is asked to set aside an
invalid administrative act in proceedings for judicial review has a
discretion whether
to grant or to withhold the remedy. It is that
discretion that accords to judicial review its essential and pivotal
role in administrative
law, for it constitutes the indispensable
moderating tool for avoiding or minimising injustice when legality
and certainty collide.’
[112] The court’s discretion can also, in an
appropriate case, be influenced by considerations of pragmatism and
practicality.
97
More recently, this court declined to set aside a
decision despite the court having found that “there exists
cogent reasons
to review and set aside the decision of the Bid
Adjudication Committee (an organ of the first respondent, being
eThekwini Municipality)
on 20 January 2010 to award the contract in
question to the second and third respondents.”
98
In refusing to set aside the decision the court (per
Swain J) stated as follows:
“
Considering all of the above, I reluctantly
conclude in the exercise of my discretion, that although the award of
the contract to
the second and third respondents was invalid when
made, I should decline to set aside the award. To do so at this
stage, would
be highly prejudicial to the second and third
respondents, as well as the ratepayers of the first respondent. The
second and third
respondents are not guilty of any wrongdoing, and
the applicant does not allege that the award was tainted by fraud or
corruption.
I am enjoined by the Supreme Court of Appeal to exercise
my discretion in a case such as the present, pragmatically and
practically.
To set aside the award at this stage of events would
satisfy neither of these criteria.”
99
[113] As stated in
Millenium
Waste Management
100
,
it is always difficult to deal with the
matter where the challenged decision has been acted upon by the
parties by accepting the
tender and concluding a contract with the
tenderer which is -
“…
often immediately followed by
further contracts concluded by the tenderer in executing the
contract. To set aside the decision to
accept the offer, with the
effect that the contract is rendered void from the outset, can have
catastrophic consequences for an
innocent tenderer, and adverse
consequences for the public at large in whose interests the
administrative body or official purported
to act. Those interests
must be carefully weighed against those of the disappointed tenderer
if an order is to be made that is
just and equitable.”
101
[114] In the present instance the applicant and the
fourth to eighth respondents are currently operating at the
respective ports
on the basis of the volumes allocated to them in
terms of the tender process arising from the impugned decision, which
is now sought
to be reviewed and set aside. The operations are
founded on valid contracts which the first respondent concluded with
each of the
parties concerned, including the applicant. As pointed
out elsewhere in this judgment, the fourth to eighth respondents are
innocent
parties in this dispute. Therefore, the practical effect of
an order setting aside the impugned decision would certainly be
unfair
and prejudicial to these respondents and of course,
eventually, the tax payer.
[115] The current stevedoring operations in terms of the
Stevedoring Agreement had, as at the time when this application was
argued
(which was January 2011) carried on for approximately five
months, presumably on an undisturbed and harmonious footing from the

general public interest perspective, I venture to imagine. The period
of the Stevedoring Agreement is only two years with an option
of a
further year extension, at the pleasure and unfettered discretion of
the first respondent. The remaining period of the contract
was
therefore only 19 months.
[116] It seems to me, therefore, that any enforced
drastic change at this stage (as envisaged in the applicant’s
relief sought)
to the current order of operation apparently
prevailing would not be without devastating practical implications.
Indeed, such change
would most likely create uncertainty and
confusion at all the South Africa’s harbours, particularly the
port of Durban, understandably
the largest in Africa and the southern
hemisphere. No evidence is needed to show that the impact of such
disruption would be extremely
dire and catastrophic not only for the
port operations but, consequentially, also for the economy of the
country.
[117] In my view, therefore, upsetting the status
quo
(in the context of the stevedoring operations under the current
agreements) in this case was vastly out of proportion to the benefit

that such an order would render to the applicant. For this reason
alone, the court would have been entitled to exercise its discretion

and decline to grant the application. Besides, the other
considerations alluded to above further influence my decision in that

direction. Indeed, I am of the view that it would not be in the
interests of justice to grant the relief sought.
[118] Therefore, considering the matter in its entirety,
I am satisfied that the first respondent gave effect to its
constitutional
obligation to procure the stevedoring services in a
cost-effective manner pursuant to a system that was fair, equitable,
transparent,
competitive and cost-effective, as required of it by
section 217(1) of the Constitution, read with section 2(1) of the
PPPFA and
section 51(1)(a)(iii) of the PFMA. Accordingly, I hold that
the impugned decision was reasonable and procedurally fair and,
therefore,
not reviewable under section 6(2) of PAJA.
[119] Concerning the issue of costs I find, however,
that in the circumstances of this case, the costs should not
necessarily follow
the result. The first respondent committed a
procedural blunder (which is elaborated upon in this judgment) on the
basis of which
the applicant was legally and constitutionally
entitled to challenge the impugned decision made pursuant to that
procedure. The
application was therefore not a vexatious exercise or
abuse of the court process. For that reason, I think it would be
unfair to
award costs against the applicant as the unsuccessful
party. It seems to me that granting no costs order would be a fair
and appropriate
thing to do in this contest.
[120] In the event, the following order is made:
1. The application for the review and setting aside of
the first respondent’s decision (more fully described in Part B
of
the notice of motion) is dismissed.
2. There is no order as to costs.
______________________
SK NDLOVU
JUDGE OF THE HIGH COURT
Appearances
:
For the applicant :
Mr
A
Stewart SC,
with him Mr
M
du Plessis
Instructed by : Edward Nathan Sonnenbergs, Durban
For the first respondent :
Mr
CJ
Pammenter SC,
with him Mr
DJ
Saks
.
Instructed by : Livingston Leandy Inc., Durban
Dates of argument : 9 November 2010; 7 January 2011
Date of Judgment : 30 March 2011
1
Annexure
“WM1”
2
Section
2 of
Act 9 of 1989
3
Annexure
“WM9” to the applicant’s founding affidavit
4
Section
1 clause 9 of the RFP
5
Section
1, clause
9.4 of the RFP
6
Section
1 clause 14 of the RFP
7
Section
1, clause 14.10 of the RFP
8
Section
2, clause 1.2 of the RFP
9
Section
2, clause 6.1.1 of the RFP
10
Section
2, clause 6.3.5 of the RFP
11
Section
2, clause 6.4 of the RFP
12
Section
6, clauses 2, 5 and 8 of the RFP
13
Para
2 of the Notes
14
Para
8.5 of the Notes (at p574 of the Record)
15
Para
10.1 of the Notes (at p575 of the Record)
16
P
ara
11.7 of the Notes (at p576) of the Record
17
P
aras
10,11 and 12 of the Notes (at p575-6 of the Record)
18
Para
14 of the Notes (at p576 of the Record)
19
P
ara
1(a) of the Record (at 584 of the Record)
20
Annexure
WN12
21
The
Republic of South Africa Constitution Act, 1996 (“the
Constitution”)
22
Act
No. 5 of 2000
23
Section
2(1) of the PPPFA
24
Annexure
“A”
25
Section
2 clause 6.4 (Phase 3) of the RFP
26
Section
2 clause 6.4 (Phase 4) of the RFP
27
Section
2 clause 6.4 (Phase 5)
28
Paragraph
94 of the applicant’s founding affidavit
29
Act
No. 3 of 2000
30
Section
1 clause 14.2 of the RFP
31
At
p600 of the Record
32
Section
2 clause 7.3 of the RFP
33
Act
1 of 1999
34
1912
AD 642
35
Pharmaceutical
Manufacturers Association of South Africa & Another: In re Ex
Parte President of the Republic of South Africa
&Others
[2000] ZACC 1
;
2000
(2) SA 674
(CC)
36
Para
89-90
37
The
issue of the first respondent being an organ of State is dealt with
in the succeeding paragraphs
38
Legal
Succession to the South African Transport Services Act 9 of
1989
39
1999
(1) SA 329
(CkH) at 350 F-I
40
The
first respondent initially contended:
“
I point out that the tender
was not adjudicated in terms of the Preferential Procurement Policy
Framework Act 5 of 2000 (“the
PPPFA”), for the reason
that the First Respondent is not an organ of state as defined in
terms of Section 1(iii) of that
Act.” (Para 9 of the answering
affidavit)
41
Section
239 of the Constitution
42
Section
1 clause 9 of the RFP
43
Section
1(iii)
44
Section
51(1)(a)
45
Section
1, clause 9 of the RFP
46
See
clause 1.3.1, at p272 of the Record , where it is stated that :
“
Transnet will accordingly
allow a preference in accordance with the 90/10 preference system,
as per the PPPFA, to companies who
provide a BBBEE Accreditation
Certificate.”
See
also clause 9.2.3.3 of the PPM, at p335 of the Record.
47
Para
8.5 of the Notes
48
Section
2, clause 6.4 (Phase 3) of the RFP
49
1911
TPD 1152
at 1159
50
1912
AD 242
51
Hlatswqyo
at p259
52
1920
AD 583
53
Dabner
at 594
54
1972
(1) SA 589
(A)
55
Gentiruco
at 600A-C
56
1970
(2) SA 185
(T) at 199D
57
Blou
v Lampert
at 199D
58
Section
34 of the Constitution
59
Act
66 of 1995
60
Section
1 clause 14.11 and 14.12 of the RFP
61
The
score sheets appear at pp511-519 of the Record
62
See
p514 of the Record
63
Section
2 clause 6.1.1 of the RFP
64
See
para 20(i) of Amanda van Vuuren’s affidavit, at pp227-8 of the
Record
65
Unreported
decision of CPD – Case No 9137/2006 undated
66
Mhonko’s
Waste,
supra
, at para 28
67
Unreported
decision of the NPD – Case no AR1028/03: dated 27 February
2004
68
Roy
Raymond, Supra, at para 5
69
Clause
6.12 of the PPM
70
Section
2 clause 1.2 of the RFP
71
Section
1 clause
15.8 of the RFP. See also clause 14.7;
Section 2 clauses 6.3.3 and 6.3.5
72
Para
77 of the applicant’s founding affidavit
73
Section
6 of Act 33 of 1957
74
Section
6 clause 8 of the RFP
75
2000
(4) SA 413
(SCA)
76
Firechem,
supra,
at 429H-I
77
Section
2 clause 7 of the RFP
78
Para
4 of the Notes
79
See
also:
South African Post Office Ltd v Chairperson, Western Cape
Provincial Tender Board & Others
2001 (2) SA 675
(C)
80
Mhonko’s
Waste and Security Services CC & Others v Transnet Ltd
(unreported)
Case
No
.
9137/2006 (CPD) undated at para 25
81
Mhonko’s
Waste, ibid
82
Section
2, clause 7.3 of the RFP
83
South
African Post Office Ltd v Chairperson, Western Cape Provincial
Tender Board and others
2001 (2) SA 675
(C) para 16
84
S.
A. Post Office, Supra
85
Metro
Projects CC & Another v Klerksdorp Local Municipality and others
2004(1) SA16 (SCA) para 14
86
Metro
Projects, Supra
87
Section
6 clause 2 of the RFP
88
Ibid,
Section 6 clause 5
89
Para
9.3 of the Notes
90
Compact
Oxford English Dictionary for Students, 3 ed (2005) at 488; The New
Shorter Oxford English Dictionary, Vol I (1993)at
p1264
91
Goodman
Bros v Transnet
1998 (4) SA 989
(W) at 997B
92
Tetra
Mobile Radio (Pty) Ltd v MEC, Department of Works
2008 (1) SA
438
(SCA) para 8
93
Section
1, clause 15.5 of the RFP. See also section 2, clause 6.3.5
94
Moseme
Road Construction CC and others v King Civil Engineering Contractors
(Pty) Ltd
2010 (4) SA 359
(SCA), at para 21
95
Chairperson,
Standing Committee & Others v JFE Sapela Electronics (Pty) Ltd &
Others
2008 (2) SA 638
(SCA) para 28
96
2004
(6) SA 222
(SCA) at 246C-D
97
Moseme
Road Construction CC & Others, supra
, at para 15
98
Vukukhanye
Personnel Services CC v EThekwini Municipality & Others
(unreported) Case No. 8110/2010 (KZD) handed down
on 1 December 2010.
99
Vukukhanye
Personnel Services, supra
, para 33. See also
Chairperson,
STC & Others v JFE Sapela
Electronics
(Pty) Ltd & Others
2008 (2) SA 638
(SCA) at 649J
100
Millenium
Waste Management (Pty) Ltd v Chairperson, Tender Board:Limpopo
2008
(2) SA 481
at 490C
101
Millenium
Waste, supra,
at 490C-E