The City of Cape Town launched a scathing attack on the government’s settlement with the construction companies implicated in collusion during the construction of stadiums for the 2010 Fifa World Cup, saying the businesses were allowed to get away with corruption “scot-free”.
The City’s criticism follows the presidential Infrastructure Coordinating Commission’s (PICC) announcement that seven listed construction companies agreed on a programme of initiatives that would accelerate transformation in the industry.
The agreement was reached with companies with a combined construction revenue of about R45 billion, comprising of WBHO Construction, Aveng, Murray & Roberts, Group Five, Basil Read, Raubex and Stefanutti Stocks, according to the Department of Economic Development.
The department said the seven companies would contribute about R1.5bn over 12 years to a fund, which would be established for socio-economic development.
The deal also included that each of the companies becomes fully transformed with at least 40 percent of equity in the hands of black South Africans.
The construction companies would also mentor up to three emerging black-owned enterprises, so that they develop the necessary skills.
As part of the agreement, each company signed a declaration to promote ethical and legal operations, free of collusion or corruption and to confirm they will expose, confront and eradicate any sign of wrongdoing in the industry.
Mayor Patricia de Lille said government should be “ashamed for misleading” the country into thinking municipalities would be compensated for collusion by construction companies.
De Lille described the move as a lack of accountability, which PICC chairperson Gugile Nkwinti endorsed.
“Last week, it was reported that municipalities, which have incurred a loss of approximately R112bn with the building of the 2010 Fifa World Cup stadiums will not get any compensation out of the settlement the government reached with the construction companies involved,” she said.
De Lille said the only “punishment” the companies faced was the creation of a R1.5bn slush fund they must now contribute towards. “Essentially, residents are paying for the crimes and failures of construction companies.”
She also lambasted the municipalities who agreed to the arrangement, saying they have failed themselves and their residents.
“This is exactly why the City of Cape Town refused to settle and hand over our battle to the national government. We will fight for justice and the return of the R429.4m owed to our residents.”