Cities to lodge Civil Claims against construction firms

Posted On Wednesday, 26 June 2013 14:08 Published by eProp Commercial Property News
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Various cities across South Africa are planning to lodge civil damages claims against construction firms involved in the development of their respective 2010 FIFA World Cup stadiums.

Soccer CityThe City of Cape Town has announced its intent to lodge civil damages claims against the construction firms involved in the construction of Cape Town Stadium – the city's purpose-built 2010 FIFA World Cup Stadium.

It recently came to light that almost 20 of the country's largest construction firms were involved in large-scale collusion and price-fixing, which created the false illusion of competition in the South African market and in most cases the artificial inflation of project prices. Yesterday, the Competition Commission detailed the agreements it had reached with 15 of 18 identified firms that will see them collectively paying a fine of R1.46 billion.

According to the Competition Commission, Group 5 and WBHO had met in December 2006. WBHO was said to have given Group 5 a cover price for the Cape Town Stadium project that would see Group 5 submit a non-competitive bid for the project tender.

WBHO and Stefanutti Stocks then did the same thing in the same month that would ensure that WBHO would win the tender and so the WBHO/Murray & Roberts joint venture was awarded the contract. However, the Commission has stated that it does not believe that the meetings in question were illegal, thus fines for the projects in question were not included in the figures released yesterday.

The same was said to have happened at Soccer City in Soweto, where Grinaker-LTA and Stefanutti Stocks agreed to a cover price that would result in Grinaker winning the tender, and at Peter Mokaba Stadium in Polokwane, where Concor and Liviero reached similar agreements, but WBHO was awarded the tender anyway.

The City of Cape Town is now in discussions with lawyers and analysts, which will determine when it submits its damages claim. The City of Johannesburg, on the other hand, has said that they will seek damages in line with the decisions of the SA Local Government Association, from which they are waiting word.

Last modified on Tuesday, 27 May 2014 19:24

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