The Sunday Mail
Business Reporter
A SOUTH African independent adjudicator engaged by Unki Mine to break the impasse between the miner and two contractors in the US$26 million Impali Housing Project has ruled that the contracts were fundamentally flawed in favour of the mining house.
Bambanani JV and Dohne Construction signed a contract with platinum miner Unki on March 6, 2013 for construction of 99 and 158 housing units respectively under the NEC 3 Engineering and Construction Contract main option B.
The “works information”, which stipulates what is expected of the contractor, indicated that the Bambanani and Dohne should supply and install all project materials. However, Unki later indicated
that it would supply the bulk of the materials.
Subsequently, a dispute arose pertaining to the rates to be applied for purchase of the materials that were to be given to the contractors. Ideally, the cost of the materials would be deducted using a rate agreed by the parties.
Crucially, it was not a labour-only contract as the contractor was also supposed to be paid for installation labour and profit margins on installed work.
The two aggrieved contractors, who had already moved off-site, argued that the rates Unki was using to pay them were not agreed upon.
Bambanani JV claims it was prejudiced to the tune of US$543 000, and Dohne Construction says its figure is US$400 000.
The two contractors were carrying out works valued at a combined US$28,6 million.
Adjudication reports compiled by Mr Ian Massey seen by this paper concluded that while the contractors erred in signing the unfair contracts, there was need for scheduled prices to be corrected.
He also ruled that the amount due to the contractors must be calculated, validated and paid in accordance with the provisions of the amended contracts.
“An incorrect schedule of prices was compiled by the employer and included into the schedules submitted to the contractor for signature under the cover of the employer’s letter of March 26, 2013 . . .
“The value of the work done to date must be reassessed using the above principles and the amount due to the contractor calculated.
“This amount must the certified and paid in accordance with the provisions of the contract as amended in accordance with the above recorded concessions,” said Mr Massey.
Delays in completion of the project were ruled to be “a consequence of the predicament created by the situation that prevailed and flowed from the breach (of contract)” made by Unki.
Mr Massey, therefore, said the two contractors were entitled to an extension to complete their jobs.
In September 2013, Unki launched an investigation into its housing project following allegations of “exploitative contracts” by local contractors.
Six contractors – Newbase Construction, Dohne Construction, Ubuntu Construction, Citizen Construction, Bambanani Construction and Searlbridge Construction – had been engaged to build houses for mine workers at the Shurugwi platinum mine.
The deadlock between the mine company and some of the contractors led to the intervention of the adjudicator.
One contractor who spoke on condition of anonymity said: “We have been vindicated. We have been trying to resolve these matters since the beginning, we were forced to leave site and forced to operate under extreme difficulties.
“The adjudicator’s decision will assist us in promptly finishing off the project. Now we pray that he project manager act appropriately by implementing the solutions proffered. The problem we have is of a very arrogant client who may also fail to implement the ruling.
“All project decisions are being made by a tight-knit team of Anglo-American executives based in Johannesburg with little appreciation and understanding of matters affecting the project.
“One would argue that since they are not Zimbabweans they have no interest in seeing the project let alone the Zimbabwean contractors being successful.”
