Question NW3595 to the Minister of Transport
05 December 2018 - NW3595
Van Der Walt, Ms D to ask the Minister of Transport
(1)(a) What are the names of the contractors employed by the SA National Roads Agency Ltd to construct the N1 - 27: Polokwane Eastern Ring-Road Phase 2, (b) why did this important contract (details furnished) come to a halt, (c) on what date did the project start, (d) on what date was it halted, (e) what is the total cost of the project and (f) what total amount had already been paid to the contractors of the project as at the latest specified date for which information is available; (2) whether the contract includes any penalties for late completion; if not, what is the position in this regard; if so, what are the relevant details; (3) will this project be completed; if not, why not; if so, what are the full relevant details?
Reply:
1. (a) Basil Read Limited
(b) Contract NRA N.001-270-2013/1: NATIONAL ROUTE 1 SECTION 27: THE POLOKWANE EASTERN RING-ROAD PHASE 2 : NEW CONSTRUCTION AND IMPROVEMENTS BETWEEN KM 10.5 AND KM 25.4
The project came to a halt because Basil Read Limited fell into severe cash flow difficulties early in 2018 and went into voluntary Business Rescue on 15 June 2018 in terms of applicable legislation.
(c) Commencement date was 1 December 2015.
(d) Halted on 15 June 2018.
(e) Total cost of the construction at award was R 561 919 579.46 excluding Contingencies, Contract Price Adjustment, Rise and Fall, and VAT.
(f) R 403 000 000.00 excluding VAT. Up to end October 2018.
2. Yes, the original contract includes penalties of R80 000 per day excluding VAT for late completion. Penalities become applicable only after the contractural end date has been reached.
3. Yes, the Project will be completed. Under Business Rescue Legislation SANRAL has to provide Basil Read Limited with the opportunity to complete the construction. However if the Business Rescue process fails, SANRAL will follow the contractural procedures and engage with with the guarantor to step-in and make sure that the Project is completed successfully.