Aveng in ‘critically important’ fight against ruling on canned Sanral project
Firm says the case is significant for SA’s construction sector, ‘which is plagued and held ransom by unlawful community actions’
Aveng says it will appeal a court ruling that the SA National Roads Agency (Sanral) can go ahead with claiming damages from the construction group over an incomplete R1.7bn project.
Aveng canned a joint project with Austria’s Strabag International GmbH following violent protests against the project, which entails building a 1.1km-long bridge across the Mtentu River on the N2 Wild Coast.
However, a court blocked the construction company’s bid to stop Sanral from claiming damages for not completing the project.
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“The Aveng-Strabag joint venture considers the dismissal of the application to be wrong and, based on legal advice, is appealing the judgment,” Aveng said.
The contractors said the matter was “critically important … to the broader South African construction industry, which is plagued and held ransom by unlawful community actions of the nature experienced by the Aveng-Strabag joint venture”.
The joint venture terminated the contract, citing force majeure, in late January.
“Sanral, despite itself having suspended the works on site for 83 days for the same reasons, took the approach that there was no force majeure and that the Aveng-Strabag joint venture’s termination constituted an abandonment of the contract.”
The contractors had provided two bonds as security to Sanral for the project, including a performance guarantee of R245m and a retention money guarantee of R82m.
Aveng said the joint venture had a right to terminate the contract after being prevented from working on the site by “community unrest, protest action and threats of violence against its personnel related to community demands made against Sanral”.
The decision to end the contract “will be vindicated by the facts when properly ventilated and considered through the dispute resolution provisions of the contract”, it said.
Bloomberg reported earlier in March that an SA engineering contractors’ lobby group had asked the government to better enforce security as criminals had disrupted or vandalised R25.5bn of construction projects across the country.
Armed gangs recently disrupted the joint venture’s Mtentu Bridge project, and a R2.4bn oil-storage investment project at Saldanha in the Western Cape was halted on March 13 after people demanding to be part of the project burnt down properties, the SA Forum of Civil Engineering Contractors (Safcec) said in a March 18 letter addressed to finance minister Tito Mboweni.