WBHO, Aveng and Stefanutti Stocks have so far been named in collusion and bid-rigging damages claim. Photo: Simphiwe Mbokazi/African News Agency (ANA)
WBHO, Aveng and Stefanutti Stocks have so far been named in collusion and bid-rigging damages claim. Photo: Simphiwe Mbokazi/African News Agency (ANA)

Cape Town Stadium R429m claim set for 2020

By Roy Cokayne Time of article published Nov 12, 2018

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PRETORIA – The City of Cape Town’s R429.47 million high court civil damages claim against listed construction groups WBHO, Aveng and Stefanutti Stocks related to collusion and bid-rigging on the Cape Town Stadium has been set down to be heard in 2020.

However, a decision has not yet been taken by the City on whether to add Group Five to the claim.

Luthando Tyhalibongo, media manager for the City of Cape Town, said on Friday that the case was set down to be heard between February 10 and March 20, 2020 and the city was “currently considering its position” in regard to Group Five. 

This follows the Competition Tribunal in August this year confirming a settlement agreement in terms of which Group Five was granted immunity for co-operating with the Competition Commission's investigation into the construction industry and disclosing its participation in 15 projects in the construction fast-track settlement process.

This settlement process was launched by the commission in 2011 and resulted in 15 construction companies concluding consent agreements in 2013 in terms of which they agreed to pay penalties totalling R1.46 billion for collusion and bid-rigging.

The Green Point Stadium in Cape Town was among the 15 projects covered by the settlement agreement reached between Group Five and the commission in August.

It said Group Five in December 2006 reached an agreement with its competitor, WBHO Construction, in terms of which the parties agreed on the submission of a cover price on the tender for the construction of the Green Point Stadium in contravention of the Competition Act.

A cover price was not intended to win the tender and was sufficiently high and/or contained conditions that would be unacceptable to the client to ensure the firm providing the cover price did not win the tender.

The tender was awarded to the Murray & Roberts (M&R)/WBHO joint venture and the project completed in December 2009.

Willie Meyburgh, the chief executive of Stefanutti Stocks, said last week that the company remained confident that it could defend the claim.

Louwtjie Nel, the chief executive of WBHO, told Business Report in 2015 it did not believe the City of Cape Town had suffered any damage and had given notice of its intention to defend the claim.

“We're confident about our case. We don't think shareholders should be concerned about it and that is why we have not made any provision for it,” he said at the time.

M&R was not included in the City of Cape Town’s civil damages claim.

Ed Jardim, 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, lodged in 2015, was then believed to be the first claim lodged following the conclusion of the Competition Commission’s construction fast-track process.

The SA National Roads Agency (Sanral) in May 2016 served civil damages claims with a total value of between R600 and R700 million against against WBHO, M&R, Concor, which merged with M&R in 2006, Group Five, Basil Read, Stefanutti Stocks and Raubex.

However, the seven listed companies agreed in October 2016 to collectively contribute R1.5bn towards development projects and committed to promote transformation and black participation and ownership in the sector in terms of the Voluntary Rebuilding Programme agreement reached with the government.


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