Contractual issues resolved at BAIC plant in PE - Chinese management company


An agreement has been reached between the Beijing Industrial Designing and Researching Institute (BIDR) and some principal contractors at the manufacturing facility of Chinese automaker BAIC outside Port Elizabeth, the BIDR said in a statement on Thursday afternoon.
According to BIDR it has resolved outstanding contractual disagreements.
BIDR, which is responsible for construction management of BAIC SA's vehicle manufacturing facility in the Coega special economic zone (SEZ), said in a statement that payment delays resulted in partial temporary suspension of work by some main contractors.

The BAIC Group is a Chinese holding company that includes numerous auto manufacturers.
As part of the agreement, BIDR has undertaken to settle outstanding payment so that work can resume as soon as possible.

City Press reported earlier that major contractors at the R11bn BAIC motor plant being built at Coega outside Port Elizabeth had halted work for more than a week owing to non-payment for work done.

The Industrial Development Corporation (IDC) has a 35% stake in the project.

The commercial manager of one of the contractors told City Press that his company was owed R40m. The managing director of another contractor claimed it was owed about R2m.

In July President Cyril Ramaphosa and Chinese President Xi Jinping hailed the opening of the BAIC auto manufacturing plant in Coega as a milestone for the two countries' economies.

At the official opening of the plant, BAIC indicated that it will be starting full-scale production of its compact Sports Utility Vehicle in the fourth quarter of 2018, linked to an investment deal that was signed in 2015.

BAIC said in a statement at the time that the first phase of its SA plant comprised a 4 200m² office block, an assembly and body shop of 42 000m², and robotic equipment. Construction on the 21 000m² paint shop was scheduled for completion by the end of 2019.

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