Basil Read subcontractors hope for resolution

BASIL Read is remaining tight-lipped about the number and value of claims it has submitted to Eskom related to the Medupi power station project.

The group declined last week to respond to a number of questions emailed to it by Business Report about claims it had submitted to Eskom on its own behalf and on behalf of subcontractors it had appointed at Medupi. It also declined to comment on what it was doing to assist subcontractors who had outstanding claims from going out of business.

Jenny von Ehrenberg, the investor relations manager at Basil Read, said the information requested was confidential in nature, therefore the group was not in a position to respond.

The questions posed by Business Report followed an urgent application by subcontractor Baarata Construction & Projects for the liquidation of Basil Read. Baarata claimed that it was owed R4.2 million for the supply and installation of ceilings and partitions in various buildings at Medupi that it had completed.

However, Judge Nomonde Mngqibisa-Thusi ruled in the North Gauteng High Court in Pretoria that a case for urgency had not been made and dismissed the application with costs without considering the merits of Baarata’s claim.

Baarata’s contract was initially expected to be completed by the end of May 2013 but various delays, including strikes, had resulted in it being extended and the delay and disruption claim against Eskom.

Baarata’s urgent application followed the firm being notified last month that Absa had been appointed by the SA Revenue Service (Sars) as an agent to collect all money in Baarata’s bank account and pay it over to Sars.

Jannie Lewies, the attorney for Baarata, said after the dismissal of the urgent application that three other subcontractors to Basil Read at Medupi had indicated that they would apply to join Baarata’s liquidation application if urgency had been proved in the application. Lewies said these three subcontractors were owed R60m, R17m and R31m, respectively, but declined to identify them.

Basil Read in June 2013 terminated an R83m contract it had subcontracted to engineering solutions provider Thusananga Gast for alleged nonperformance.

Gast chief executive Kevin Gast said it trusted that with the recent introduction of a new executive team at Basil Read the disputes with subcontractors could be resolved on a more amicable basis without subcontractors resorting to the courts on an urgent basis to find relief because the majority of them did not have a significant cash flow to support an arbitration process.

Gast claimed Basil Read still owed his firm more than R55m for the terminated contract and hoped the arbitration of this dispute would be finalised within the next six months.

Basil Read shares on the JSE on Friday fell by 8.27 percent to R3.44, which valued the company at R453m.