Amazon may dismiss plans to construct the Amazon Development Centre (ADC), its Africa headquarters in Cape Town’s R4.6 billion River Club multi-purpose complex.
Property developer, Liesbeek Leisure Property Trust (LLPT), has filed an affidavit in the Supreme Court of Appeal stating that they will be forced to cancel the entire project if there are any more delays.
In April 2021, Cape Town approved a new development to house Amazon’s new African headquarters. Besides that, the LLPT was granted permission to develop the 15-hectare plot.
However, following a South African court hearing in January 2022, the proposed Amazon headquarters could hit a rough patch if an indigenous activist’s legal challenge is allowed to proceed.
And in March 2022, the Western Cape High Court ordered that all construction work at the site be halted because LLPT had not engaged in meaningful consultation with impacted First Nations people, who regard the development area as sacred land.
The developer then sought leave to appeal, but the High Court denied the request in a May 2022 ruling. It now requests that the Supreme Court of Appeal (SCA) overturn the order.
According to an affidavit from LLPT spokesperson and trustee, James Tannenberger, further delays could push the work back by 12 to 24 months.
Following negotiations to adjust these dates, ADC has stated unequivocally that any further significant delay cannot and will not be tolerated.
Failure to complete construction and lease commencement by the agreed-upon dates may result in an R450,000 ($26,720) delay penalty payable to Amazon for each day the project is delayed.
Further, LLPT would be liable to Rand Merchant Bank for R23 million ($1,365,721) in penalties for cancelled loan agreements, and R115 million ($6,828,605) for standing time to contrac
Besides, suspending construction would cost 6,000 direct jobs and 19,000 indirect jobs.
The contempt of court matter was postponed until July 27, 2022.
This is sad news