No certainty on cost of Gautrain water works

FILE :Traversing of Gautrain tunnel from the Park town station (JHB) to 'The Wilds' tunnel exit in Houghton. Picture: Antoine de Ras.

FILE :Traversing of Gautrain tunnel from the Park town station (JHB) to 'The Wilds' tunnel exit in Houghton. Picture: Antoine de Ras.

Published Nov 29, 2013

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Johannesburg - The additional costs of repairing or paying financial compensation for groundwater seepage problems at a Gautrain tunnel will be split between the partners in the Bombela Civil Joint Venture in which Murray & Roberts (M&R) has a 45 percent shareholding.

However, Henry Laas, the group chief executive of the listed construction and engineering group, said yesterday it was impossible to comment on the quantum of the costs or compensation because the parties still had to agree what further work was required.

Cobus Bester, M&R’s financial director, added the group would not be making any provision in its financial results to December unless it got clarity on the cost.

Bester said it might be possible if the technical difficulties related to the remedial work were sorted out to take a view on the cost by the end of June. Laas and Bester were speaking during a teleconference with stakeholders on the arbitration award this week in the dispute between the Gauteng provincial government and Bombela Concession Company, related to the interpretation of the specification for the amount of groundwater contractually allowed to drain into the Gautrain tunnel over a specified period of time.

Laas said the arbitration tribunal ruled that in certain parts of the tunnel the non-compliance with specification could be settled through financial compensation while in other parts of the tunnel additional work would be required.

M&R has several disputes and claims related to the Gautrain, including its delay and disruption claim that was only expected to be settled in 2016.

The Gautrain is one of three major project claims instituted by M&R worth a total of more than R2 billion. The other claims relate to the Gorgon Pioneer materials offloading facility in Australia and Dubai International Airport.

Laas said this arbitration award did not have any impact and was separate and unrelated to M&R’s other Gautrain claims. The only way it could have an impact was in trying to resolve all the commercial disputes related to the Gautrain in a settlement agreement.

Laas said any additional work on the Gautrain would be carried out by the Bombela Civil Joint Venture. The remaining shareholding in the joint venture is held by French construction group Bouygues (45 percent) and empowerment group SPG (10 percent).

Laas stressed the tribunal’s award specifically recorded that the functionality and safe operation of the Gautrain system was not threatened by the inflow of water into the tunnel and therefore all Gautrain services would continue to operate normally pending decisions regarding the extent and nature of possible additional work and other commercial arrangements to be agreed.

An amount of R200 million was spent by the joint venture before the tunnel was opened in an initial attempt to reduce the water seepage. Laas said it was possible to achieve the work without affecting the Gautrain service. Bester said if the tunnel was closed, work could take nine months, while if work was done in early hours of the morning and weekends, it could (take) 14 months to three years. - Business Report

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