R100M debt halts schools’ construction

Contractors bemoan state payment system is ‘killing’ their businesses

The new Grens Laerskool in Baysville is one of the schools where building has been affected by government’s late payment.
Image: ARETHA LINDEN

Between May and November builders walked off the sites of 37 Eastern Cape schools under construction due to non-payment of a staggering R104m.

A further R9m is owed to consultants for the projects.

This was revealed by public works MEC Pemmy Majodina in a report to the provincial legislature last week.

She was responding to a question by DA MPL Vicky Knoetze.

The report states her department is still waiting for payment from the education department and will only pay the builders and consultants once have received the funds.

“Last year contractors were owed more than R300m. This is very painful. The government is assisting in killing the local construction business.”

Public works spokesperson Vuyokazi Mbanjwa said the service level agreement between the two departments was that public works paid contractors on behalf of education and education would reimburse them. Mbanjwa said they stopped paying the contractors after education failed to pay them more than R84m.

On Monday, both parties confirmed that the outstanding amount had now been paid and that public works had started making payments to the contractors.

Read more of the story on DispatchLIVE

By: Aretha Linden

Source: DispatchLIVE

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