The proposed multibillion-rand Dube Tradeport industrial zone north of Durban, which has been beset by problems, has hit another snag, with one of the bidding consortiums threatening legal action over an alleged irregular tender procedure.

If the matter heads for the courts it could further delay the start of construction on the R2,5 billon Shaka Zulu International Airport, which has been more than 30 years in the planning and is a key component to the project.

The planned project - which includes the new airport, with cargo facilities designed to boost exports - was dogged by infighting between the Airports Company SA (Acsa) and national and provincial governments.

Now that those problems have been sorted out, the Indiza Group, one of only two bidding consortiums, is readying for a fight.

Dube Tradeport said this week that it would enter negotiations with the Ilembe Consortium as a preferred bidder for the King Shaka International Airport project, opening the way for construction to start in March next year. Ilembe is led by Group Five and WBHO Construction.

However, Indiza Group, a consortium led by Grinaker-LTA and the only other contender for the contract, has cried foul over Dube Tradeport's decision not to evaluate its proposal, saying Dube Tradeport's reasons for evaluating only one proposal, were not justified for a project of its size.

Dube Tradeport was established by the provincial government of KwaZulu-Natal to manage the proposed industrial development zone, of which the airport forms an integral part.

Grinaker-LTA MD Neil Cloete said Indiza was informed by Dube Tradeport that certain of the items in its proposal did not comply with the tender document. But while the group had provided a response to Dube, there had been no discourse on the matter.

"We have provided a seriously detailed proposal that took four months to compile and cost between R35 million and R40 million, yet at no stage was there any discussion with us.

"In our experience - and we've been in business for over 100 years - there has always been an opportunity to discuss and negotiate."

The group wants its proposal to be subjected to a "fair evaluation against the other proposal", in terms of the criteria laid out in Dube Tradeport's request for proposals, and said it viewed the conduct of Dube Tradeport in excluding Indiza as "unlawful, contrary to the agreed process and against the public and national interest".

Cloete said the impact of losing out on the contract would not be significant on the group, but Grinaker was pursuing the issue as a matter of principle.

"Government is in a situation where it is in a one-on-one with a preferred bidder without having assessed another tender. It is a highly irregular situation."

The consortium was restricted by a confidentiality agreement from disclosing details but said it had appealed to the responsible minister, KwaZulu-Natal finance and economic development MEC Zweli Mkhize, to have its proposal fairly adjudicated.

However, if Mkhize did not entertain its request, it would take the matter to court. "We have no other option than to take the legal route to have our bid evaluated," says Cloete.

According to Dube Tradeport CE Rohan Persad, the company excluded Indiza from the process as its proposal did not comply with the tender process. "We went through a thorough, rigorous process. In our book there is no excuse for the noncompliance," he said, but declined to discuss the details of the procurement procedure.

"We are happy to have the matter assessed by a court." He was confident that legal action would not delay the start of the project.

The company was hoping to conclude contractual negotiations by the end of March, and to receive its record of decision on the environmental impact assessment by the end of April, which should clear the way for construction to start. The project was expected to be completed in the last quarter of 2009 and would be operational by the beginning of 2010.

The province will spend R700 million on the Dube Tradeport industrial zone, while Acsa will foot the R2,5 billion bill for the airport.

Business Day