Construction firms, City reach settlement in Cape Town Stadium collusion case

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Construction groups Stefanutti, Aveng and WBHO have reached a settlement with the City of Cape Town in the multi-million civil case against them for alleged collusion in the construction of Cape Town Stadium.

Stefanutti said in a trading statement on Wednesday that while the three contractors and the city "remain confident of their respective legal positions", they all agreed it was in the "best interests of all to amicably settle the matter rather than prolong an extended and costly arbitration and court process."

The City previously sought at least over R430 million from the companies. This settlement involves an annual payment of R31.3 million collectively by the contractors over the next three years, which amounts to around R93 million.

WBHO and Stefanutti also made a commitment to invest in social responsibility projects, including solar power sites, in Cape Town.

Cape Town Mayor Geordin Hill-Lewis said in a separate statement the cash payments as well as a minimum of R42.5 million investment in solar energy systems "at sites of its choosing” by the two companies, "concludes what would otherwise have been a protracted arbitration."

"Throughout the process, the city has emphasised that any settlement be a matter of public record, and not subject to confidentiality," he said

"The construction industry has felt the impact of the last decade of weak economic growth, and the recovery of this sector is crucial to growth and jobs."

The case has its genesis in a Competition Commission investigation into collusion by construction firms in various projects. 

News24 reported in 2013 that the Competition Tribunal confirmed it reached a settlement with several construction companies for collusive tendering. At the time, the firms agreed to pay penalties of R1.46 billion.  


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