BULAWAYO City Council fears being dragged to court if it cancels a South African contractor’s lease agreement for the long-awaited Egodini mall project.
The contractor, Terracotta Trading (Pvt) Ltd, was awarded the tender to redevelop Basch Street terminus, popularly known as Egodini, in 2012 to a state-of-the-art regional and transport hub at a cost of US$60million.
To date, Terracotta has failed to deliver on the project amid reports that the company did not have the capital for the required scope of the project.
At one point, Terracotta proposed to launch a broad-based retail equity scheme to allow city residents to acquire a maximum of 30% shareholding in the project in a bid to raise the much needed capital.
In July, the contractor proposed reducing the project’s investment from US$60million to US$10,5million, leading to calls for the contract to be terminated.
The city’s technical team later met Terracotta and advised the contractor that reducing the proposed variation could only be possible with a change in the scope of the project.
This would mean re-advertising the entire tender.
According to the latest council minutes of the environmental, management and engineering committee report, there was consensus among city fathers that Terracotta’s contract be cancelled, but concerns were raised over possible court action.
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“(Councillor Ntandoyenkosi Ndlovu) indicated that residents wanted to see the Egodini project completed,” the minutes read in part.
“Cancellation of the project would lead to a court battle, which would also take long without any development.
“He also expressed concern about the huge amounts to be paid (US$3 million) to Terracotta upon cancellation for the development so far.
“He suggested that the developer, Terracotta, should be engaged.”
Councillor Josiah Mutangi concurred.
Councillor Dumisani Netha, however, said the contract must be cancelled.
“(Netha) expressed concern on the prolonged time taken with the construction of Egodini,” the minutes read.
“He expressed concern why the council was being patient with the Egodini contractor.
“The contract should have been cancelled a long time ago.”
Other councillors were also divided on the matter, with some warning against legal action while others insisted that the contract be cancelled as Terracotta had failed to deliver.
The council report also revealed that the law did not allow Terracotta to downgrade the investment from US$60million to US$10,5million.
“The contract had not yet been cancelled and the developer was still on the site, hence the developer could continue developing,” the minutes read.
“Site handover had been done in 2018 and the contract period was for 18 months which the contractor failed to meet.
“The legal officer explained that if the contractor had revised the amount and pegged it at US$10,5million, then there was no option but to cancel the contract.”
The Affirmative Action Group has been pushing for the cancellation of the contract citing lack of progress over the years.
Reports have previously questioned how Terracotta won the tender amid allegations that some councillors received bribes.
Government has also raised a stink with Provincial Affairs minister Judith Ncube at one point summoning the contractor to explain the delays.
In 2023, a taxi rank and vending bays were opened to the public.
