Gautrain arbitration favors Murray and Roberts

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An arbitration tribunal in South Africa has ruled in favor of The Bombela Concession Company (BCC) over the claim against the Gauteng provincial government related to the Gautrain Sandton station cavern.

The award amounted to R345 million (US$ 22.5mn) in favor of BCC one of whose shareholders was Murray and Roberts one of South Africa’s largest engineering and construction companies. The final figure to be awarded will have to take into consideration interest and arbitration costs from the date the costs were incurred to the date the award was made.

Murray & Roberts had a 45 percent shareholding in joint venture while other shareholders in the joint venture were Bouygues with 45 percent and empowerment group SPG with 10 percent.

According to M&R chief executive Henry Laas the claim arose because the Sandton Station contract was intended to be “a cut and cover” design, which involved excavating and building the station and covering it up afterwards. The Gauteng government decided to adopt a different methodology that was more expensive than the methodology provided for in M&R’s tender.

Other claims regarding the railway project are still in arbitration the biggest being a delay and disruption claim, relating to a two year delay in the handover by the provincial government of land parcels for the project.

The Gautrain is an 80 kilometer railway mass rapid transport system in Gauteng linking Johannesburg, Pretoria, Ekhuruleni and O.R. Tambo International Airport. The railway was built by the BCC and completed in June 2012