Construction stops on N3 outside Durban as ‘Stakeholders’ demand 30% stake
A group calling itself "Stakeholders", and made up of a controversial Durban business grouping, Delangokubona, the ANC’s Umkhonto we Sizwe Military Veterans Association and a local taxi association, has put a complete halt to a multimillion N3 highway project outside Durban.
The R276.45m Hammarsdale interchange on the busy N3 highway between Durban and Pietermaritzburg was due for completion in November 2018. But a few weeks ago, members of Stakeholders descended on the site, threatening managers and workers, demanding a 30% stake of the project. They reportedly said the project would not see the light of the day unless their demands for a stake were met.
Since then workers, engineers and other technical staff belonging to Stefanutti, the main contractor, have been fearful about going to work, lest they come under attack. The delay in the construction is causing chaos for motorists who have to endure delays as some of the lanes in both directions are closed off due to the construction.
The South African National Roads Agency (Sanral) said several attempts to resolve the issues failed. On Wednesday, Ravi Sonny, Sanral eastern region design and construction manager, apologised to motorists for the delays on the busy highway.
He said Sanral "had to instruct that the work on this project be temporarily suspended". He added that Sanral was not in a position to redraw the contracts to accommodate the Stakeholders, as this could add millions of rand to conclude the project.
"We believe that this contract should be exempted from the 30% local procurement requirement because [the deal] was concluded before the [2017 Preferential Procurement] Regulations came into effect. We cannot afford to pay extra amount that would be required if the contract for this project was to be re-drawn," he said.
Stefanutti CEO Willem Meyburgh was not available for comment. But he recently told journalists that their (Stefanutti and Sanral’s) effort to resolve the impasse was hampered by the exorbitant demand of Stakeholders.
He said the contract between Stefanutti and Sanral was concluded prior to the enactment of the new procurement regulation, and that his company had exceeded local participation of 12%.
However, Malombo Nxumalo, a local councillor in Inchanga, disagreed. He said when work on project commenced, the new and stricter broad-based black economic empowerment regulations were already in place.
"Local contractors are right to demand a slice of the contract because local communities have to be empowered," he said, adding that the contractors were also compelled to source a certain percentage of labour from local communities.
Delangokubona Business Forum, one of the three organisations demanding a stake in this contract, has caused a number of delays in construction around Durban in recent months.
These include a R1.8bn revamp of Tsogo Sun’s Suncoast Casino complex, the R120m Durban City Fleet building site, which was nearly torched and the R132m inner-city hotel construction. Some of Delangokubona leaders have court orders against them for threatening violence against businesses.
One of the leaders of Delangokubona, Bheki Mnyandu, said they were also willing to find a solution that would end the impasse on the N3 Hammersdale interchange. "But black people can no longer tolerate [being] flung on the margins of economic activities. We have to ensure that local black business get their fair share of local projects," he said.
On Wednesday morning, dozens of Delangokubona supporters halted construction at the Oceans Umhlanga site. That is a R4.2bn project spearheaded by Durban businessperson Vivian Reddy.