Medupi
Photo by: Duane Daws
Engineering and construction group Basil Read on Friday confirmed that a dispute between it and engineering solutions provider Gast, its subcontractor on the Medupi power station construction project, would be resolved by way of arbitration.
This followed accusations by both parties that the other did not comply with contractual obligations, which led to a termination of the agreement on May 21.
Gast said in a statement on Thursday that it had terminated the contract with Basil Read as a result of Basil Read’s repudiation of the contract.
Gast contended that these included failures to provide access to the site for extended periods of time, not providing power to Gast, as well as a failure to provide on-site transport for Gast’s labour.
In addition, it claimed that Basil Read did not make payments of certified amounts, paying only 15 of the 24 monthly certificates issued by Gast.
“Further, Basil Read ignored the delays that were created by the industrial action at Medupi, which resulted in the subsequent on-site lockout of all contractors, choosing to impose and rely on the original deadlines despite the significant delays to the project,” Gast CEO Kevin Gast said in a statement.
He argued that Gast had completed more than 95% of the project work by the time the termination became “unavoidable”.
However, JSE-listed Basil Read on Friday argued that the termination was brought about through ongoing nonperformance on the part of Gast, which had already been replaced by another subcontractor.
Basil Read deputy CEO Donny Gouveia said it was “unfortunate” that Gast had chosen to publicise the dispute.
“This was presumably done in the hope of causing public embarrassment for Basil Read and to derive some degree of commercial advantage in so doing. Gast’s conduct, however, is in direct breach of the implicit confidentiality provisions contained in the parties’ collective submission to arbitration,” he stated.