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Cape Town files claim against World Cup stadium builders

‘We don’t have to prove collusion, we just have to prove the amount the city is owed – Deputy Mayor.

The City of Cape Town filed a civil damages claim against builders Aveng Ltd., Wilson Bayly Holmes-Ovcon Ltd. and Stefanutti Stocks Holdings Ltd. for colluding on a tender for a stadium built for the 2010 FIFA Soccer World Cup.

The claim for at least R428 million will be heard in the North Gauteng High Court, Ian Neilson, Cape Town’s executive deputy mayor, said by phone on Monday. The amount claimed is subject to change, he said.

Antitrust authorities fined 15 builders, including the trio facing the Cape Town claim, a total of R1.5 billion in June 2013 for rigging contracts for projects including the construction of stadiums for the 2010 World Cup hosted by South Africa. Aveng was fined R307 million, WBHO R311 million and Stefanutti R307 million.

“We don’t have to prove collusion, we just have to prove the amount” the city is owed, Neilson said. The amount claimed was calculated using indicators such as the rates that were charged compared with market prices at the time.

Aveng “will avail itself of the full extent of its legal rights,” the Johannesburg-based company said in an e-mailed response to questions. “No material risk is anticipated based on the summons,” the company said. WBHO “is confident that it can defend the above cases and has not made a provision in this regard,” it said by e-mail. Stefanutti Stocks didn’t immediately respond to a request for comment.

©2015 Bloomberg News

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It has been remarked before that tendering collusion is not nice – but jumping up and down at the mere mention of the word “collusion” may produce some egg-on-face.

It was found that the major contractors organised amongst themselves re the World Cup Stadiums, but it remains to be proven that the margins were noticeably improved by this collusion in a very unusual situation that stretched the South African available capability to the limit.

Even if proven that the margins were noticeably inflated, then how much? The court case and all the resources and management time drawn into that may cost more than its worth; and the bureaucratic politicians who now grabs the flag and march forward may well find that they are entering an arena of major construction costs of which the accused are masters and the accusers know very little, besides the buzz words like “collusion” that has such a juicy stinky sound – to tap some cheap political points from?

“Careful”, The Referee says. Let it rest and rather tackle the tremendous infrastructure problems of the here and now.

If there hadn’t been any “collusion” they would still be throwing the foundations of the stadia today (if they had got that far). Waste of money pursuing every last million rand, because when the City wants another project done, these 3 firms could well tell them to go take a hike. But politicians are ever thus – always thinking of everything but the future.

I can’t believe this – when cANCer are accused of corruption, the screams of anguish can be heard here in the UK, but both previous postings (as well as all 9 of their reader supporters) appear to think big business is not bound by the same standards?
And don’t forget, that if the city is able to prove its damages and the companies contest the issue, costs are quite likely to be awarded to the plaintifs……

End of comments.

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