Contractor wants R9m security fee

Durban17092014Congestion around the new flyover intersection which is still under construction.Picture:Marilyn Bernard

Durban17092014Congestion around the new flyover intersection which is still under construction.Picture:Marilyn Bernard

Published Sep 18, 2014

Share

Durban - The main contractor responsible for the M19/N2 interchange project, which is in danger of being abandoned, wants the SA National Roads Agency (Sanral) to pay its security costs of R9 million because of violent attacks from outside forces.

However, Sanral contends that this is just a ploy and negotiating tool by joint venture partners Rumdel Construction and EXR Construction Holdings, whose R352m contract is almost over.

It also contends that Rumdel has exaggerated its security fears.

The matter was argued before Judge Graham Lopes in the Durban High Court on Wednesday, where judgment was reserved.

The judge did discuss the possibility of recommending that the matter go to trial so that oral evidence could be heard.

Rumdel Construction project manager, Gary Williams, contended in court papers that the construction site had been subjected to regular and extensive violent attacks.

A dispute has now arisen with Sanral on whether it should be responsible for taking reasonable steps to ensure a safe working environment, or if it should pay the costs for private security to ensure that construction could continue.

Rumdel wants an order compelling Sanral to pay the costs of additional security measures required, alterna-tively requiring the agency to provide the relevant security.

It is also seeking declaratory relief entitling the company to terminate its contract because of unforeseeable circumstances.

Senior advocate Kemp J Kemp, acting for Rumdel, argued that two communities adjacent to the construction site were behind the violence.

Many of these local residents were hired as workforce after a threatening letter warning of bloodshed should they not be employed.

While non-skilled labour was hired, Kemp argued that since then there had been numerous illegal work stoppages which had resulted in intimidation, mob violence and destruction of property.

After a month-long wildcat strike in May, these employees were dismissed.

Kemp told Lopes on Wednesday that none of the affected residents was re-employed, “otherwise the contract would not come to completion”.

He said that after additional security guards had been deployed, there had been very few incidents.

On the issue of payment, Lopes asked Kemp: “You’re not suggesting that if I don’t make an order, Rumdel cannot afford to pay for the security?”

Kemp said Rumdel might decide it could not continue with the construction.

“We’re here in the interests of Rumdel and Sanral, that the project gets completed,” he said.

Senior advocate, Greg Harpur, acting for Sanral, argued Rumdel’s R9m claim was “unjustified” and that it was claiming from public funds, which were scarce.

“Government funds aren’t there to be wasted,” Harpur said.

He felt Rumdel knew the risks when it took on the contract and had made provision.

He said the company was being “opportunistic”, using the claim as a bargaining tool at the end of the contract.

“The applicant says they are entitled to R9m. At the end of the day these are two large companies in this venture. There is no reason why they can’t share the cost at R4.5m each, as R352m would have passed through their hands by the end of the contract,” Harpur argued.

Sanral contends this is all Rumdel’s fault as it failed to properly deal with the risk as the contractor is obliged to keep unauthorised people off the site.

Harpur contended that it was Rumdel’s problem if it was under-compensated for security, and felt it could not claim from state funds.

He said the contractor would have taken out riot or disorder insurance to cover the security costs.

He also said Rumdel had the opportunity to raise the issue of security when the contract was amended in 2011, by mutual consent, to include a labour force from the two communities.

He said Rumdel already knew of security incidents.

Commenting on the “exaggerated” security concerns, Harpur referred to the weekly security report where weeks had gone by without incidents of violence being reported.

Related Topics: