The KwaZulu-Natal Department of Public Works and Infrastructure is reeling from the R10-million pre-payment to a contractor who has since vanished without fulfilling his contractual obligations, leading to accusations that the intention was always to loot.
Sunday World understands that the department has initiated a legal process to recover the funds after hiring Themane Construction as one of the subcontractors in a R56-million construction project.
Public Works MEC Martin Meyer officially opened the project this week, which includes, among other things, 32 offices, two large boardrooms, and four kitchens. It had stalled because the main contractor abandoned work, citing threats from the construction mafia.
Meyer recently announced that the department has unblocked construction projects to the value of R300-million through various interventions, including physical site visits.
According to the department, unblocked projects refer to where work was once stopped for various reasons, including non-payment, protests, strikes or threats.
Public Works regional director Simphiwe Blose confirmed to Sunday World that, despite receiving a payment of just over R9.5 million, one of the subcontractors failed to fulfil his contractual obligations.
“Although we do want to assist small contractors, especially with money to cover primary costs, it is always disheartening when they decide to be dishonest. One of the subcontractors was paid by the department, but no work was done,” said Blose.
Meyer struggled to clarify the process to recover the money, lamenting that it had now become a legal matter.
“We have taken a decision that we won’t be lenient on contractors who misuse public funds by not doing what they are supposed to do,” he said. Meyer said the department would blacklist companies that abandon projects after getting paid.
He said recouping money from contractors was often an audacious and difficult legal process.
“But we have learnt our lessons,” Meyer said.
In 2022, a meeting of the parliamentary portfolio committee on human settlements flagged KwaZulu-Natal as one of the provinces highly impacted by blocked projects.
The meeting heard that issues behind the scourge included corruption, incapacity of contractors and the construction mafia.
It has become a common occurrence for construction companies to embezzle money from the government and then claim liquidation and incapacity.
Another contractor then takes over the work, causing the project costs to skyrocket.
A senior staff member from the department, who lacked the authority to speak to the media, revealed to Sunday World that the department made an advance payment to the contractor, citing tenuous justifications for such a payment despite the contractor’s lack of work. “The department never conducted any due diligence. It was tantamount to fraud and corruption because the contractor took the money and fled,” said the person.
“It was bizarre, and the whole thing was rushed. The company itself had no offices. We were unsurprised to discover that he had not entered the site and remained untraceable,” he said. Government insiders also believed that the money went to a fictitious company whose owners were untraceable.
I’m not surprised about this shit contractor col Themane management consulting. This shit contractor must not say he delay The service due to construction mafia.there no such. He a special of knocking people around the country. His work is to aproched people who’s has credit of purchasing the material. Once he got that opportunity is too claim the money run way. that is his work. Himself is a construction Mafia. He knocked me million till today no progress in school of westonaria secondary school. I took the matter to Gauteng Le
I’m not surprised about this shit contractor col Themane management consulting. This shit contractor must not say he delay The service due to construction mafia.there no such. He a special of knocking people around the country. His work is to aproched people who’s has credit of purchasing the material. Once he got that opportunity is too claim the money run way. that is his work. Himself is a construction Mafia. He knocked me million till today no progress in school of westonaria secondary school. I took the matter to Gauteng Legislature
This is how the world works advance payment of even half a million rand is too much to pay
People run away with R30,000 so what about 10 million.
There should be no advance payment of any amount.
If any advance payment is made for a tender treat it as a gift
Simple measure, as we do in the banks. Pay as work progresses. Everybody wins.
Do not give contracts to people with no money. It is obvious that they will take the money and flee. How do you have a business, but you have no cash flow. It,s like going on a trip with your car, but no money for petrol. When you give someone a contract, you ask for a bank gaurantee ensuring they are in a position to fulfil the contract. The problem is, most of them are fucking crooks and crimininals. Edwin Sodi got millions upfront for the Hammanskraal contract and he did fuckall, but he took the money. Stupid fucking Government officials also.
People who do this make it harder for honest businesses to get help. Advance payments solve a lot of cashflow issues at the initial stage of the project. Sadly things like this happen.
Nothing wrong with advance payments if proper due diligence is conducted. We as small companies usually don’t have the initial cashflow. But honestly how can one justify a cash advancement of R10m? Some officials are involved. An advance payment of R10m is enough for someone to prove themselves with a small portion of the job. This smells a rat.
Crime engineers….masters at their craft…..and they just give you the middle finger….stupid ….
No tablets for stupid.
I provided goods to a school in Tembisa years back submitted my invoice to dept of finance in fox street paid for the supplies from my own pocket 15 years later still waiting to be paid
Government should just give guarantee to potential creditors however only limited to the progress of the project instead of giving money. Who signed the papers without verification must be taken to court.
That’s a non compliance in terms of the MFMA/PFMA. How do you make payment but there’s no work done? Payment should be proportionate to the level of work done.
Prepayments are prohibited in Act.