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The Nelson Mandela Bay Municipality says it will be pursuing claims against the construction companies who built the Nelson Mandela Bay stadium.
Metrominute reports that the process will be spearheaded by Budget and Treasury Portfolio Councillor Balu Naran.
Executive mayor, Benson Fihla, said in a report to Council which meets tomorrow, that once the construction companies involved have paid the penalties the Competition Commission, this would amount to an admission of guilt.
Fihla says once they have received a certificate of admission from the Commission it would institute a claim of between 10% and 30% against the total amount paid to the construction companies.
It says that in addition it would be necessary to pursue the issue of insurance against currency fluctuations "which the companies had claimed but not paid into the fund", adding that engagement with the commission with regard to the Certificate of Admission and negotiations with regard to a claim against the companies involved should be started.
The South African Local Government Association (SALGA) has suggested that Nelson Mandela Bay could claim up to R590 million from the construction companies involved in building the Nelson Mandela Bay Stadium.
SALGA said in a recent statement that "given the cartel overcharge estimates, a range of 10-30% is a reasonable estimate of the overcharge¨.
The Nelson Mandela Bay Stadium cost R1.967 billion, which means a claim could range between R197 million (10%) and R590 million (30%).
SALGA said that in the UK there was a rebuttable presumption that the over-charge was 20%, which would amount to R393 million in the case of the metro.
SALGA said it had been briefed by the Competition Commission in November last year and again in February 2013 when it had raised concerns about "what then appeared to be prima facie evidence of bid rigging in respect of the contracts associated with the 2010 World Cup-related infrastructure in some of the hosting municipalities¨.
The Association said on behalf of the affected municipalities it was now considering a number of options, including negotiating with the firms to reach an agreement on damages.
(Source: Metrominute - to subscribe mail metminutes@iafrica.com)
