Global e-commerce giant Amazon will not tolerate more construction delays at its planned headquarters in Cape Town due to a court standoff.
An affidavit filed in court this week suggests the R4.6bn development, with Amazon as its anchor tenant, could be scrapped should Amazon pull out.
Construction workers were forced to down tools by a court interdict related to heritage impact concerns. But some recently returned to do “remedial work”, prompting a further court application by objectors seeking to halt development.
The affidavit lays bare the scale of the battle over the site straddling the banks of the Liesbeek River. James Tannenberger, spokesperson and a trustee of Liesbeek Leisure Property Trust (LLPT), said further work stoppages could invoke a delay penalty of R450,000 a day, payable to Amazon.
He said delays had already squeezed the construction programme. “Amazon Development Centre recently agreed to reset the practical completion date and consequently the lease commencement date…reducing its own tight tenant works programme. In the negotiations to adjust these dates, ADC has made it clear that it cannot and will not tolerate any further significant delay,” said Tannenberger in the affidavit.
LLPT was advised that if the courts ruled in favour of a continued work stoppage, it could last 12 to 24 months. “Any such delay would almost certainly see ADC terminating the development agreement and the lease agreements, as it would be entitled to do. Indeed, even a reduced delay of six moths will result in termination by ADC,” he said.
Tannenberger said other financial implications, included Rand Merchant Bank penalties amounting to R23m in the event of cancelled loan agreements and a R115m “standing time” payment to contractor WBHO.
Traditional groups involved in the court wrangle have mixed views on the implications of the River Club Development being aborted. The Western Cape First Nations Collective (WCFNC), representing groups in favour of the project, said opposition to it was “an assault on our desire to return to our ancestral land”.
Abandoning the development would mean the loss of a planned Khoisan memorial centre and breakthrough for recognition of indigenous rights, said WCFNC spokesperson Zenzile Khoisan. He accused objectors of undermining the will of traditional groups. “What kind of ruthless people would oppose first nations people and other people who have been hard hit by devastating economic times?”
Tauriq Jenkins, speaking for groups opposed to the project and head of the Goringhaicona Khoi Khoin Indigenous Traditional Council, said the developers only had themselves to blame. “They can’t play victim in this thing when they are the people who went full into continuing construction and started construction knowing well that [it] had the Sword of Damocles hovering over its head,” said Jenkins.
Zwelinzima Vavi , general secretary of the SA Federation of Trade Unions, has lambasted Amazon for their “deafening silence” on the development dispute.
Business and property stakeholders have warned an aborted development would damage SA’s efforts to attract investment in the Information, Communications and Technology sector.
But opposition groups say the River Club and resultant court action cannot be separated from SA’s history of conquest and dispossession. Rather than selling the site to developers, government could have used it to reverse generations of dispossession, they argue.
City of Cape Town spokesperson Priya Reddy said the decision to back the development was “fair and inclusive” and based on enormous potential benefits, including jobs.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.