Photo by: Duane Daws
Construction group Murray & Roberts' (M&R's) share price on the JSE rose by 6% early on Friday after it announced that an arbitration tribunal had awarded the Bombela Concession Company (BCC) a provisional quantum award of R354-million in relation to a claim lodged by the Bombela Civil Joint Venture (BCJV) against the Gauteng provincial government for the costs incurred as a result of design changes to the Gautrain project.
BCC, which operates the Gautrain system under a concession agreement, had contracted the BCJV, in which construction group M&R holds a 45% stake, to design and build the Gautrain system.
The construction of the Sandton station was tendered as a cut-and-cover design; however, this was subsequently changed under a variation order issued by the Gauteng province to a cavern design, which attracted additional costs.
The amount due now had to be finalised by escalating the value of the award from the date on which the costs were incurred to the date on which the award was issued, based on its constituent parts of rands and euros.
M&R said the province was liable for all arbitration costs related to this matter and had to pay interest at the prime overdraft rate plus 2% from the date of finalisation of the amount due.
“We are satisfied with the outcome of the proceedings and it further strengthens our confidence in our entitlement with respect to unresolved claims on the Gautrain project due for resolution,” the construction group added.
M&R's shares rose 6% to R10.25 at 10:45 on Friday, up 6% on Thursday's close of R9.67.