Sanral to withdraw civil damages claims against firms

A Sanral board shows different e-tag fees in Johannesburg. File picture: Leon Nicholas

A Sanral board shows different e-tag fees in Johannesburg. File picture: Leon Nicholas

Published Nov 7, 2016

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Johannesburg - The SA National Roads Agency Limited (Sanral) will be withdrawing the civil damages claims valued at between R600 million and R760 million that it lodged against several listed construction companies for collusion and bid-rigging on its tenders.

Vusi Mona, the general manager of communications at Sanral, said last week that Sanral was party to the settlement agreement reached between the government through the Presidential Infrastructure Co-ordinating Commission (PICC) and the contractors.

Mona confirmed there was an intention by Sanral to withdraw the claims subject to certain formal processes being finalised.

Sanral served summonses for civil damages in May against WBHO; Murray & Roberts (M&R); Concor, which merged with M&R in 2006; Group Five; Basil Read; Stefanutti Stocks; and Raubex.

The PICC and SA Forum of Civil Engineering Contractors settlement agreement resulted in seven listed construction companies last month agreeing to collectively contribute R1.25 billion over 12 years to a fund to be established for socio-economic development and undertake further transformation initiatives.

It also settled the exposure of these companies to potential claims for damages from identified public entities, which apart from Sanral were not identified, arising primarily from the fast-track settlement process.

Not settled

However, it did not settle the more than R428 million civil damages claim lodged by the City of Cape Town against WBHO, Aveng and Stefanutti Stocks for colluding on the tender for the construction of the Green Point Stadium for the 2010 Fifa World Cup.

It follows 15 construction companies concluding separate settlement agreements with the Competition Commission in 2013 to pay penalties totalling R1.46bn for collusion and bid-rigging.

The seven companies used different wording in separate stock exchange new service announcements that they issued last month about the PICC agreement, which made it unclear if Sanral had withdrawn its claims or these claims had been fully and finally settled.

Mona referred to a cabinet statement issued last month that indicated certain processes were being attended to and the government would make an announcement once these had been concluded.

He added that the agreement with the seven companies was based on a collective approach by the government, which meant “Sanral will not define itself outside this approach”.

This was in response to a question from Business Report on whether Sanral, once it had withdrawn its claims, would be compensated in some other way for the damages it suffered because of the collusive practices of these companies.

Sorita van Tonder, a spokeswoman for Aveng, said the settlement agreement provided for all potential civil damages claims from identified public entities to be settled.

Agreement

Van Tonder said mechanisms existed in the agreement for a signatory construction company and the government to engage in the event that such a claim was brought forward and for the construction company to reduce its annual contributions to the socio-economic development fund following final adjudication of such a claim.

Shereen Vally-Kara, a spokesperson for WBHO, said the settlement agreement was reached to avoid a protracted legal process in defending civil claims through lengthy court cases, which would be costly to both the companies and taxpayers.

“It was, therefore, more practical to settle, to restore our relationship with the government and accelerate transformation in our industry for the good of the industry and South Africa.

“This agreement is very positive for WBHO. By playing our part in making our industry more inclusive of black contractors, government will support us, infrastructure spend will be unlocked and we will play our part in the building of infrastructure in South Africa,” she said.

Group Five chief executive Eric Vemer said the group had to date not paid any claims, but any successful claim might be set off against the contribution due by that company.

BUSINESS REPORT

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