Group Five gets no relief from the courts. The High Court of Johannesburg said it was unable to interdict the

construction group's Ghanaian client from demanding penalties for project

delays.

Group Five has lost its court bid to halt the owners of the Kpone oil and gas

power plant in Ghana from demanding payment of the maximum penalty allowed for

continuous delays to the project. Cenpower, which commissioned Group Five to

build the plant is demanding $62.7 million from two of the bank guarantee

providers for the project.

The High Court of Johannesburg dismissed an application to interdict Cenpower

from demanding payment on the bonds, saying that the legal requirements in

terms of the bonds had to be separated from Group Five's contract to build the

plant. Group Five said it's failure to complete the project by last month, the

latest deadline, was due to contaminated fuel supplied by Cenpower. The plant

was supposed to be commissioned last year.

Other problems hindering the project included a change in Ghanaian law

affecting the clearing of goods arriving at the country's port and also due to

setbacks in seawater tunnelling. In the year to end-June, the engineering,

construction and infrastructure group recognised a loss of 1.3 rand billion on its

Kpone contract, resulting in an operating loss for the period. The Kpone

delays have also affected Group Five's cash position.

Group Five has also turned to arbiters for relief. It said it had made a

submission to the International Chamber of Commerce in Paris for claims

against the client and that it had been advised that its claims have merit.

In terms of the contract process, the group will continue to progress its

contractual rights and entitlements through the alternative dispute resolution

procedures, which includes the recovery of the payment of delay damages in

terms of the guarantees," Group Five said.

The company said a liquidity plan disclosed in its year-end results included

the impact of any potential delay-damages payment by Cenpower on the bank

guarantees in issue.

Its shares sank 30% to 70c on Friday. They've declined 95% this year.