'Builders owed R300m'

Gauteng building contractors—many of them small and black-owned—say they face bankruptcy because the Gauteng housing department has failed to release at least R300-million in payments.

The contractors, who said they are too afraid to confront the department, have told the National Black Contractors and Allied Traders (Nabcat) and black business body Nafcoc they have not been paid for invoices submitted as far back as last November.

Nabcat president Sam Moleshiwa said his association has tried to engage the department, but to no avail. “The problem is we don’t get to see the government decision-makers,” he said.

And Nafcoc secretary general Gregory Mofokeng said he has repeatedly tried to speak to housing department head Benedicta Monama and provincial housing minister Nomvula Mokonyane.
Despite leaving numerous messages, no one called back.

Mofokeng has learned from “people within the department” that contractors are owed more than R300-million. “Project managers say the department has run out of money and can only pay in April.”

Mofokeng said the delay means contractors cannot pay suppliers and financial institutions and some have been blacklisted.

Other contractors abandoned sites because they can no longer pay suppliers and workers. In some cases unguarded building materials have been stolen.

The acting director of the Alexandra Renewal Project, Neels Letter, confirmed this, saying: “It’s a fact that the department is behind with payments and our contractors are having problems.”

Yet the department insisted no payments are outstanding. Mokonyane’s spokesperson, Mongezi Mnyani, said it is “absolutely untrue” that the department has run out of money. “I don’t know where they got this story from. It is highly impossible that we would owe contractors money. We are completely up to date on all our payments.”

Mnyani also claimed the department knows of no sites where work has been halted. The department’s chief financial officer, Anthony Green, said payment is withheld only if a contractor’s claim or work is rejected.

The Mail & Guardian has seen a letter Nafcoc sent the department on March 9 requesting a meeting on payment delays. It cites “massive layoffs of skilled and unskilled labourers”, “loss of equipment on site” and “mounting interest bills from financiers”. Mofokeng said there has been no response.

Green said the department responded to Nafcoc, saying complaints will not be considered unless the contractors are named.

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