Buffalo City Metropolitan Municipality v Asla Construction (Pty) Limited

Buffalo City Metropolitan Municipality awarded Asla Construction a turnkey housing contract for the Greater Duncan Village development. After failed prior tenders for parts of the Reeston East housing project, senior municipal officials purported to incorporate an additional 953 erven (Reeston Phase 3, Stage 2) into the existing turnkey contract without a new competitive procurement process. Asla performed work and payment certificates were issued, but the Municipality later alleged the Reeston award was unlawful for non-compliance with section 217 of the Constitution. The Municipality sought to review and set aside its own decision, initially under PAJA and out of time. The High Court condoned the delay and declared the contract invalid; the Supreme Court of Appeal overturned that decision on delay grounds. The matter came before the Constitutional Court, where the Municipality relied on a legality review following the Gijima decision.

Leave to appeal was granted; the appeal was upheld; the order of the Supreme Court of Appeal was set aside and replaced with an order declaring the Municipality’s decision to award contract BCC/DES/PIU/HOUS/1122/2010 (Reeston Phase 3, Stage 2) to Asla Construction constitutionally invalid; no order as to costs.

The case is a leading authority on self-review by organs of state after Gijima, clarifying how delay operates in legality reviews and confirming that serious procurement illegality under section 217 will generally justify overlooking delay. It reinforces constitutional procurement requirements and limits attempts to regularise unlawful state contracts through settlement agreements.