Cape Town - Cape Town deputy mayor Ian Neilson has admitted that the city was suspicious about the high costs for the construction of Cape Town Stadium, but said the city had to carry on to meet the deadline to complete the R4.5 billion venue for the World Cup.
On Wednesday the DA in council came under attack from the ANC over a “lack of political oversight” over the finances during the construction of the stadium. Council was asked to approve the appointment of a law firm and a team of experts for R4 million to investigate how much money the city could recover if the Competition Commission finds companies involved guilty of collusion and bid rigging.
Neilson admitted: “We were very suspicious from the beginning. We were particularly concerned when we got to the sub-contracts, where prices came in twice as high than we expected. The city didn’t just sit back, we looked for other contractors… but in the end the city had to proceed because the deadline to complete was upon us.”
Mayco recommended the appointment of Adams & Adams, a law firm specialising in competition law, to investigate possible damages the city could claim.
In a memorandum to the city, Adams & Adams said: “The Competition Commission’s view is that the information and documentation they have received provides strong evidence in support of allegations of collusions and bid-rigging in respect of the construction of the Cape Town Stadium.” The law firm will appoint a team of specialists including forensic auditors and construction industry specialists to calculate the damages the city could recover.
The city has notified the Competition Commission of its formal status as a complainant in the case.
As a complainant the city can negotiate a settlement if contractors admit to flouting competition law in the construction of the stadium.
Earlier this year, the Hawks revealed that top construction companies had illegally rigged contracts worth billions of rand. The Hawks said their investigation disclosed details of a “decades-long, formal kickback and price-fixing racket that allegedly involved prominent names in the industry”. Some of the companies said to be involved in the bid-rigging are Wilson Bayly Holmes-Ovcon (WBHO), Stefanutti Stocks, Murray & Roberts, Group Five, Concor, and Aveng.
The Competition Commission is also investigating possible tender-rigging by the companies related to contracts worth at least R30bn, including the Cape Town Stadium.
ANC chief whip Xolani Sotashe said: “It is very interesting to listen to the deputy mayor on the lack of political oversight over the finances of the institution. That was the role of the deputy mayor.”
The recommendation for council to approve the team of experts to quantify damages also included the establishment of a mayoral sub-committee to report on progress in the matter. Sotashe added: “We are going to waste R4m of ratepayers’ money for something that should never have happened.”
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