Major N1 upgrade halted due to cash flow problems

By now, motorists travelling on the N1 north and south will have noticed that all construction work has ceased at both ring-road projects outside Polokwane and Musina.

“The work on both Polokwane and Musina ring road projects was stopped when the notice to file for Business Rescue was issued on 14 June 2018,” said Mr Vusi Mona, general manager of communications at the South African National Road Agency. This was in response to a media enquiry by the Zoutpansberger as to why construction work had stopped.

Mona was referring to construction giant Basil Read’s application for business rescue after they had run into financial distress regarding their cash flow. The company had been appointed as the main contractor on both projects.

Basil Read was placed under business rescue a day after their application on 15 June. The same day, John Dymoke Lightfoot and Siviwe Dongwana were appointed as the joint business-rescue practitioners tasked with devising a business-rescue plan to help keep Basil Read’s doors open as opposed to having the company liquidated.

Since Basil Read was placed under business rescue, awaiting possible funding, several meetings have taken place between the company’s business-rescue practitioners and the company’s creditors and other stakeholders. Part of the process also included the submission of a business-rescue plan on 20 August. “There was a meeting held on Monday, 3 September, were it was unanimously agreed to adjourn the meeting till 27 September. This decision was made, based on a motion put to the meeting by one of the potential lenders, The Industrial Development Corporation of South Africa Limited (IDC),” said Mona. As for the way forward regarding Basil Read’s capability of continuing with the projects, Mona said that the SANRAL management was considering these developments and would decide in due course. “…but it is highly likely that SANRAL will await the outcome of the meeting of 27 September,” said Mona.

Basil Read is at present the main contractor on seven major road construction projects, of which the Polokwane and Musina ring-road projects form part. Uncertainty exists how the current process will affect traffic flow on the N1 south and north, as well as how much longer motorists will have to endure the frustration of road works. The business-rescue plan did indicate a new anticipated completion date for the projects. For Polokwane it is 30 March 2019, and for Musina the new completion date is 30 August 2019. “The anticipated completion dates as set out above are based on best estimates provided by the company but may vary, depending on any exigencies that may arise,” reads the business-rescue report.

News - Date: 17 September 2018

Andries van Zyl

Andries joined the Zoutpansberger and Limpopo Mirror in April 1993 as a darkroom assistant. Within a couple of months he moved over to the production side of the newspaper and eventually doubled as a reporter. In 1995 he left the newspaper group and travelled overseas for a couple of months. In 1996, Andries rejoined the Zoutpansberger as a reporter. In August 2002, he was appointed as News Editor of the Zoutpansberger, a position he holds until today.

Email: [email protected]