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Toll road boost for construction giants
Toll road boost for construction giants

Toll road boost for construction giants


Business Day - Sep 13th 2011, 09:03

While Group Five announced yesterday its consortium had been awarded preferred bidder status for the R10bn Winelands toll-road project in the Western Cape, the project hangs in the balance as the City of Cape Town has threatened legal action if the state goes ahead with its plans. 

Shares of Group Five’s partner in the Protea Parkways Consortium, Basil Read, jumped nearly 9% to a high of R13,03 after the construction companies announced they had been awarded the contract. Basil Read closed 6,72% higher at R12,70. Group Five also bucked yesterday’s stock market rout to gain 10c (0,39%) to close at R25,60.

Group Five yesterday announced that the Protea Parkways Consortium — it also includes French civil engineering group Bouygues — would now, in consultation and negotiation with the South African National Roads Agency (Sanral), take the project through to its financial close.

Sanral CEO Nazir Alli said last month he was "disappointed" by the City of Cape Town after it threatened legal action against Sanral if it went ahead with the R10bn N1-N2 toll road.

The city said the agency’s processes for developing the project were flawed.

Construction is due to begin in February and will take about three years to complete.

Sanral, which has struggled this year to apply tolls to the Gauteng Freeway Improvement Project after a public outcry about the high costs involved, has not yet begun construction on the Winelands route.

Cape Town mayoral committee member Brett Herron said he had written to Transport Minister Sbu Ndebele to inform him about the city’s declaration of a dispute under the Intergovernmental Relations Act.

Deputy Transport Minister Jeremy Cronin last week proposed that the government scrap plans to construct toll roads across SA and instead redirect resources into improving public transport. This follows the outcry over the expenses connected to the tolling of urban roads in Gauteng.

Mr Cronin, who was addressing the Food and Allied Workers Union congress in his capacity as deputy general secretary of the South African Communist Party (SACP), said the public outcry was a lesson "to make things right".

The Winelands project encompasses 105km of the N1 highway between Cape Town and Worcester and a 70km stretch of the N2 between Bot River and Cape Town. In 2003, the project received environmental authorisation and it was gazetted as a toll road in 2008.  

Read more about: services | logistics

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