Johannesburg - The first stage of the City of Cape Town’s High Court battle to recoup alleged damages of R428.75 million from three construction companies that colluded on the tender for the construction of the Greenpoint Stadium for the 2010 Soccer World Cup will be heard in December.
The City of Cape Town applied last year to amend the particulars of its civil damages claim lodged in December 2014 but this was being opposed by listed Wilson Bayly Holmes-Ovcon (WBHO).
The other construction companies cited in the civil damages claim are listed construction companies Aveng and Stefanutti Stocks.
Ian Neilson, the City of Cape Town’s executive deputy mayor, confirmed last week that its application to amend the particulars of its civil damages claim would be heard in the North Gauteng High Court in December and it was being opposed by WBHO.
Neilson said the city had decided to amend the particulars of its claim after receiving notice from WBHO of its intention to file an exception to the city’s application.
“While not conceding the merits of the objections, the city considered it appropriate to amend its particulars of claim to remove any possible cause for complaint,” he said.
When a defendant’s defence to a summons is based on a technicality, it can either file an exception or an application to strike out.
Neilson said a date had not yet been set for the city’s civil damages application to be heard.
In this application, the City of Cape Town issued a summons against WBHO Construction, Stefanutti Stocks and Aveng jointly and severally for R429 474 878, alternatively R428 757 001, together with interest on the amount. Neilson previously told Business Report the quantum was determined through an assessment of the financial circumstances of the matter by a panel of expert economists, auditors and other professionals.
WBHO was in a joint venture with Murray & Roberts (M&R) when bidding for the tender and won the tender.
Settlement deal
The project was completed in November 2009. WBHO, Stefanutti Stocks and Aveng each made admissions related to the Green Point Stadium in the settlement agreements they reached with the Competition Commission in terms of the fast-track settlement process. M&R is not included in the City of Cape Town’s civil damages claim. Ed Jardim, the group communications executive at M&R, previously said the group had not been cited in the civil damages claim because it did not collude on the stadium project.
“We had an open book negotiation with the City of Cape Town and our proposed margin and revenue for the project was shared with the client,” he said.
The City of Cape Town civil damages claim was believed to be the first lodged following the conclusion of the construction fast-track settlement process launched by the Competition Commission in 2009 after an investigation uncovered widespread collusion in the industry. It resulted in 15 firms agreeing to pay penalties collectively totalling R1.46 billion for contraventions of the Competition Act.
The SA National Roads Agency (Sanral) in May served civil damages claims with a total value of between R600m and R760m against seven JSE-listed construction firms and joint ventures that admitted to colluding on its tenders.
Sanral has served claims against WBHO; M&R; Concor, which merged with M&R in 2006; Group Five; Basil Read; Stefanutti Stocks; and Raubex.
The companies are defending the claims.
BUSINESS REPORT