Gauteng and Bombela final reach settlement over construction disputes

The Gauteng Provincial Government (GPG) and Gautrain operator Bombela “have agreed to a comprehensive settlement of all disputes relating to the construction” of the rapid rail system.

“The mutually agreed settlement brings to an end protracted‚ costly and multiple legal and arbitration processes between the Gautrain Management Agency (GMA) and Bombela‚” a joint statement said on Friday.

“In terms of the agreement‚ the Gauteng Provincial Government will pay Bombela an amount of R980-million and a payment over two years of a capped amount of R294-million.”

Gauteng roads and transport MEC Dr Ismail Vadi described the deal as “akin to an amicable‚ all-inclusive out of court settlement”.

“Due to the time and extent of the costs involved in legal proceedings‚ as well as the uncertain outcomes of these protracted processes‚ the parties have agreed to this comprehensive settlement of the disputes‚” he said.

It would‚ Vadi added‚ allow “the GMA to focus on planning future improvements to the public transport system in Gauteng and paves the way for future investors in the system”.

Bombela chairman Henry Laas said: “It is expected that all legal and financial processes be finalised by mid December 2016.”

The joint statement listed the history of the claims:

– The water ingress claim: The Gautrain tunnel‚ as a drained tunnel‚ had to be built to meet the concessionaire’s stringent water inflow specifications. On completion‚ the water ingress was found to be in excess of the contract specification‚ which led to a dispute between the parties. In November 2013‚ the arbitration panel of the Arbitration Foundation of Southern Africa (AFSA) ruled in favour of the GPG.

– Sandton Station “cavern” claim: This claim is by a sub-contractor‚ the Bombela Civil Joint Venture (BCJV)‚ relating to the cost of construction of the station utilising a construction methodology different to the tendered methodology‚ was ruled in favour of BCJV by AFSA.

– The John Vorster and Jean avenues cantilever bridges claim: This claim by BCJV is for additional costs incurred following a design change to the bridges over John Vorster and Jean avenues in Centurion. This claim‚ on its merits‚ was ruled in favour of BCJV and the quantum hearing was heard in October 2016.

– Delay and disruption claim: This is a complex claim and entails over 140 individual claims. The delay and disruption claim by BCJV relates to the late handover of land for construction purposes. Due to the complexity of the claim‚ the initial arbitration hearings were focused on addressing the legal interpretation of various clauses in the Gautrain Concession Agreement. The delay and disruption claim‚ merit and quantum is scheduled to be heard in 2017 and 2018.

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