Steenkamp NO v Provincial Tender Board of the Eastern Cape

Balraz Technologies (Pty) Ltd submitted a tender for services relating to an automated cash payment system for social grants in the Eastern Cape. Although its tender appeared lowest, concerns existed regarding cost structure and technical capacity. The Provincial Tender Board nonetheless awarded part of the tender to Balraz, partly motivated by local interest and black economic empowerment considerations. Balraz incurred substantial preparatory expenses to perform under the contract. Subsequently, at the instance of an unsuccessful tenderer, the Ciskei High Court reviewed and set aside the tender awards for administrative irregularities. Balraz was later liquidated, and its liquidator (Steenkamp NO) sued the Tender Board in delict for pure economic loss consisting of wasted expenditure incurred in reliance on the award.

The appeal was dismissed with costs; the Tender Board was held not liable in delict for the appellant’s pure economic loss.

This case is a leading authority on delictual liability for pure economic loss arising from administrative action in South African law. It clarifies that negligent breaches of administrative-law duties in public procurement do not, without more, found claims for damages, reinforcing the separation between administrative-law remedies and delict. The judgment underscores a conservative, policy-based approach to extending delictual liability against organs of state.