City of Cape Town faces legal challenges over construction contracts

The City of Cape Town faces legal challenges over construction contracts, with the High Court ordering the municipality to pay R11 million to a construction company and participate in cost price adjustment. Acting Judge Veronique Barthus ruled that Baseline Civil Contractors be compensated for completed works, despite the City's counter-application to invalidate the adjudicator's decision and set aside the subsequent cost price adjustment determination.

The dispute originated from a valuation issue for works completed by Baseline upon the termination of a construction contract in June 2024. Despite the City paying the amount due under the original decision, it refused to participate in the cost price adjustment process, claiming the adjudicator had performed his function. Barthus stated that the corrected decision was valid and enforceable, and ordered the City to participate in the CPA process.

In a separate matter, World Focus Constructions' application to preserve its emergency repair contract was dismissed by the High Court, as the City had not provided one month's written notice of the date on which the replacement contract would commence.