MURRAY & Roberts shares leapt more than 11% in late afternoon trading on Friday as an arbitration tribunal announced a provisional award of R354m to the Bombela Concession Company (BCC), as part of the Gautrain Sandton Station cavern claim.
The tribunal had ruled in favour of BCC in October 2013, before making the provisional award last Wednesday against the Gauteng provincial government. The claim had been lodged by the Bombela Civil Joint Venture, which was responsible for the design and construction of the entire Gautrain system.
Murray & Roberts, holding 45%; Bouygues, also holding 45%; and SPG, holding 10%, are shareholders of the Bombela Civil Joint Venture.
"The amount due must 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," the JSE-listed group said.
"Th province is liable for all arbitration costs related to this matter and has to pay interest at the prime overdraft rate plus 2% from the date of finalisation of the amount due," the firm said. "Murray & Roberts is satisfied with the outcome of the proceedings and it further strengthens our confidence in the company’s entitlement with respect to unresolved claims on the Gautrain project due for resolution."
The construction of the Gautrain Sandton Station was tendered as a "cut-and-cover" design, but was changed under a variation order issued by the province to a "cavern design" that attracted more costs.
The joint venture claimed for the difference in the cost of the two construction designs and BCC pursued the arbitration against the province.
"The group previously communicated that the quantum would be awarded early this year. When I last spoke to them about it, they expected around R300m," Roelof Brand, construction analyst at Avior Capital Markets, said on Friday.
ALL ABOARD: Commuters wait to board the Gautrain at Rosebank station in Johannesburg. Picture: DANIEL BORN
MURRAY & Roberts shares leapt more than 11% in late afternoon trading on Friday as an arbitration tribunal announced a provisional award of R354m to the Bombela Concession Company (BCC), as part of the Gautrain Sandton Station cavern claim.
The tribunal had ruled in favour of BCC in October 2013, before making the provisional award last Wednesday against the Gauteng provincial government. The claim had been lodged by the Bombela Civil Joint Venture, which was responsible for the design and construction of the entire Gautrain system.
Murray & Roberts, holding 45%; Bouygues, also holding 45%; and SPG, holding 10%, are shareholders of the Bombela Civil Joint Venture.
"The amount due must 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," the JSE-listed group said.
"Th province is liable for all arbitration costs related to this matter and has to pay interest at the prime overdraft rate plus 2% from the date of finalisation of the amount due," the firm said. "Murray & Roberts is satisfied with the outcome of the proceedings and it further strengthens our confidence in the company’s entitlement with respect to unresolved claims on the Gautrain project due for resolution."
The construction of the Gautrain Sandton Station was tendered as a "cut-and-cover" design, but was changed under a variation order issued by the province to a "cavern design" that attracted more costs.
The joint venture claimed for the difference in the cost of the two construction designs and BCC pursued the arbitration against the province.
"The group previously communicated that the quantum would be awarded early this year. When I last spoke to them about it, they expected around R300m," Roelof Brand, construction analyst at Avior Capital Markets, said on Friday.
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