Stadium battle looms
R429.4m Greenpoint Stadium damages claim to proceed soom
THE CITY of Cape Town is ready to proceed with its R429.47 million civil damages claim against listed construction groups WBHO, Aveng and Stefanutti Stocks on the Greenpoint Stadium. Deputy executive mayor Ian Neilson told Business Report that the city was now awaiting a court date for the case after it had filed its amended particulars of claim in April.
The damages claim relates to collusion by the three companies on the tender for the design and construction of the stadium for the 2010 World Cup.
In March, WBHO failed in its High Court application to amend the city’s particulars of claim.
Neilson said WBHO had complained that the city was relying on admissions made by Aveng and Stefanutti Stocks to the Competition Commission to sustain its claim against WBHO, the only respondent that objected to the proposed amendments.
Neilson said the city believed that its reliance on the admissions made by Aveng and Stefanutti Stocks, including an agreement in respect of inflated profit margins charged to the city, was entirely permissible.
The case stemmed from admissions made by several listed construction groups in consent settlement agreements reached with the Competition Commission in terms of its fasttrack settlement process.
The Green Point Stadium was among the projects listed by WBHO and Stefanutti in the settlement that was subsequently confirmed by the Competition Tribunal in 2013.
Both companies admitted that they had reached agreement with Group Five in December 2006 to provide a cover price for this project to ensure that Group Five did not win the tender. Stefanutti Stocks admitted receiving a cover price from WBHO to ensure that it could submit a non-competitive bid and ensure that WBHO was awarded the tender.
The tender was awarded to the Murray & Roberts (M&R)/ WBHO joint venture and the project was completed in December 2009.
Aveng’s consent settlement agreement included the 2010 World Cup stadium agreement. It admitted that during or about 2006, Grinaker-LTA, part of Aveng, WBHO, M&R, Group Five, Concor, Basil Read and Stefanutti had met twice and reached agreement on the construction of the 2010 World Cup stadiums.
In terms of that agreement, Aveng admitted that these firms had agreed to allocate the Mbombela, Peter Mokaba, Moses Mabhida, Soccer City, Nelson Mandela Bay and Greenpoint tenders among themselves and to exchange cover prices.
Aveng admitted that these firms had further agreed that they should aim to obtain a 17.5 percent profit margin in all the projects.
WBHO’s settlement agreements did not include the 2010 World Cup stadiums meeting and the company had previously indicated it did not believed the meetings were a contravention of the Competition Act.
The stadiums meeting case is still pending.
WBHO also said previously that it did not believe the City of Cape Town had suffered any damage related to the Greenpoint Stadium project and it had given notice of its intention to defend the claim.
Stefanutti Stocks group chief executive Willie Meyburgh said this month that the civil damages claim was only expected to be heard towards the middle or end of next year.
He added that the claim was the only Competition Commission-related matter still hanging over Stefanutti and they were “comfortable that we can defend it”.
The City of Cape Town is awaiting a court date for its case against the construction firms.
Cape Town’s Greenpoint Stadium. The City is poised for a court showdown relating to collusion.