• Four highway upgrade projects in the Western Cape, Limpopo and the Eastern cape remain unfinished after two large contractors filed for bankruptcy.
  • Sanral is working with their insurers to find replacement contractors, or may issue tenders to complete the outstanding work.
  • One of the projects, an upgrade to the N2 near Caledon, remains only 33% completed.

Four highway projects – with a total value of almost R2.3 billion – are in limbo after Group Five and Basil Read hit a wall.

The 45-year-old Group Five filed for bankruptcy protection this month, following Basil Read, which suffered the same fate last year.  

The construction sector has been hit hard by the sharp fall in government infrastructure projects and the weak state of the SA economy.

Both Group Five and Basil Read won large tenders from Sanral to upgrade highways in the Western Cape, Limpopo and the Eastern Cape.

Sanral told Business Insider that it now has to work with the contractors’ insurers to find “another suitably qualified and experienced contractor who would complete the works”. Alternatively, Sanral will to call for formal tenders for the completion of the outstanding work.

“This tender process will take at least six months to be drafted, advertised, evaluated and awarded,” a spokesperson said.

Meanwhile, these projects remain unfinished:

N2 Caledon to Riviersonderend - only 33% completed

n2
Upgrades to the N2 between Caledon to Riviersonderend. Source: EOH Coastal and Environmental Services

Sanral awarded a R530 million tender to Group Five to upgrade almost 49km of the N2 between Caledon to Riviersonderend. The construction firm has to add passing lanes and pavement shoulders to the road.

Construction started in September 2017, and the project was supposed to span 36 months.

N1 Polokwane Bypass – 66% completed

ringroad
The Polokwane ringroad. Credit: Sanral

Basil Read won a R741.5 million tender to upgrade 14.9 km of the N1 on the eastern ring-road of Polokwane.  The upgrade included additional carriageways and construction of interchanges.

Work started in 2015, and was supposed to finish within 36 months. 

N1 Musina Bypass – 60% completed

Basil Read received a R487 million contract to construct 8 km of the new N1 ring road for Musina, along with interchanges.

Work started in March 2016 and was supposed to be wrap up within 30 months.

R61 Mthatha Upgrade – 72% completed

The R61 between Queenstown and Mthatha. Credit: JG
The R61 between Queenstown and Mthatha. Credit: JG Afrika

This R504 million project involves upgrading 27 km of the R61 at Mthatha, and also includes pavement shoulders. Basil Read started work on this project in 2015, which was supposed to span 40 months.

Basil Read received approval for its business rescue plan in October last year, but last month the company warned that its cashflow was severely constrained after "unforeseen setbacks", including a lack of buyers for its non-core assets.

Business Insider SA approached Basil Read and Group Five for comment, but have not yet received a response.

For more, go to Business Insider South Africa.

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