Mohalenyane Phakela
CONCERNS have emerged over the safety of the M800 million Ha Belo Industrial Estate in Botha-Bothe, after the Lesotho National Development Corporation (LNDC) allegedly declared the works complete while the contractor was still carrying out major works and against advice from the contracted project engineer, court documents show.
The LNDC is accused of issuing a completion certificate to the main contractor, Unik Construction, despite objections from project overseer GWC Consulting Engineers, who insisted that outstanding corrective works needed to be completed first.
This controversy is detailed in correspondence between the LNDC and GWC, whose contract was also allegedly terminated prematurely while they were still supervising the works.
GWC had been engaged by the LNDC on 24 October 2016, under a M28 518 736.85 contract that spanned 56 months. However, multiple extensions were granted due to Covid-19 restrictions and the need for resurveys and digital terrain modelling.
GWC was responsible for designing civil and structural works, supervising construction activities, coordinating sub-consultants, administering the contract, and issuing completion certificates.
Unik Construction was tasked with constructing the 51 factory shells, kiosks and mini substations.
LNDC interim Chief Executive Officer, Molise Ramaili, wrote to GWC on 7 October 2024, instructing them to suspend ongoing repairs at Ha Belo.
“The employer fully understands that the minis substations are being repaired and is willing to absolve the risks associated with these repairs. Therefore, the employer will regard any repairs pertaining to the mini substation as defects and not outstanding works,” Advocate Ramaili wrote.
However, GWC responded on 29 October 2024, warning that Unik still had outstanding corrective work.
“According to the General Conditions of Contract (GCC) clause 14.6, the engineer (GWC) has withheld payment for work done by the contractor (Unik) that does not comply with the contract requirements,” GWC said in a letter to Adv Ramaili dated 29 October 2024.
“Specifically, the costs for rectification or replacement of 19 mini-substations, five kiosks, and eco-bubbles were withheld until the contractor completed the necessary corrective work. The engineer submitted a draft Interim Payment Certificate (IPC) 62 with comments on 11 September 2024. However, the employer (LNDC) did not respond in time and instead issued the Taking Over Certificate on 12 September 2024 without finalising IPC62, which forms the basis of the project’s final cost.”
Despite this, GWC claims LNDC certified Unik’s work on 12 September 2024—without their consent or knowledge. According to GWC, the IPC needed to be finalised before any completion certificate could be issued.
“It only came to our attention on 1 October 2024 that the employer had issued the practical completion/taking over certificate to the contractor, contrary to contract clause GCC 10.1 and without the knowledge of the engineer, who is contractually responsible for that process,” wrote GWC Project Director, Meenakshi Bakaya.
“The practical completion certificate was signed on 12 September 2024 by the employer, but it should have been signed on 30 September 2024 by the engineer, as per the amended contract. Paragraph 6 of your 7 October 2024 letter falsely claims it was issued jointly with the engineer – this is a serious misrepresentation of material facts. These irregularities have consequences for project cost, handover, and the defects liability phase.
“We must place it on record that the decisions taken by the employer may negatively affect the project at this crucial completion stage. If so, the engineer must be indemnified from any unilateral decisions and actions taken by the employer, particularly those made under protest by the engineer.”
After receiving no response from the LNDC or Adv Ramaili, GWC instructed their lawyers, Sekatle Chambers Incorporated, to issue a letter of demand on 26 November 2024 for unpaid consultancy fees amounting to M636 759.11, covering the period up to September 2024.
Following another period of silence, Mr Bakaya wrote again on 16 January 2025, informing the LNDC that GWC had opted to pursue arbitration.
“We confirm that we have appointed an arbitrator on our part within the contractually stipulated 30-day period, and hope you will do the same, so that the matter may be resolved through arbitration in the interests of justice. We hope this process can proceed without resorting to court action,” the letter read.
Adv Ramaili eventually responded on 7 February 2025, not to proceed with arbitration, but to terminate GWC’s contract.
“LNDC hereby issues GWC Consulting Engineers with a notice of termination of the professional services contract signed on 25 October 2016 for the Ha Belo infrastructure and factory shells. Upon thorough consideration and examination, we have concluded that it is necessary to terminate the contract. The termination shall take effect 30 days after delivery of this notice, as per subclause 2.7.1 (f). Please propose a reconciliation statement of payments and assets due to either party so this can be concluded within the notice period,” Adv Ramaili wrote.
GWC rejected the termination through another response from Sekatle Chambers dated 13 February 2025.
“Our instructions are to inform you that the termination letter of 7 February 2025 is flawed and unlawful. The clause cited, subclause 2.7.1, presupposes a breach of contract, and you have failed to demonstrate any such breach under subparagraphs (a) to (i).”
Nonetheless, Adv Ramaili, in his 1 April 2025 response, insisted that the LNDC acted within its rights.
“Clause 2.7.1 (f) is a no-fault termination clause. The consultant (GWC) has no recourse to dispute the action. The clause grants the employer (LNDC) the sole right to terminate, and the consultant may not invoke any of its provisions in challenge,” he wrote.
Clause 2.7.1 (f) reads: “Without prejudice to any other remedies that may be available to it for breach of this contract, the LNDC may, upon written notice to the consultant, terminate this contract in case of the occurrence of any of the events specified… (f) If the LNDC, in its sole discretion and for any reason whatsoever, decides to terminate this contract. Termination under this provision shall become effective upon the expiration of 30 days after delivery of the notice of termination or on such later date as may be specified by the LNDC.”
GWC has since approached the High Court seeking redress. They want the court to declare Adv Ramaili’s interpretation of clause 2.7.1 (f) as a no-fault, non-arbitrable termination clause unlawful.
“The current application seeks to stop the illegal, unlawful and irregular termination of the contract and, by extension, the efforts to bypass dispute resolution mechanisms such as arbitration. It aims to compel the arbitration of the dispute between the parties in the interest of justice,” part of the GWC application reads.
