ADM firms to wait longer for payment: Daily Dispatch

COMPANIES contracted on Amathole District Municipality infrastructure projects will have to wait another five months for the municipality to be able to pay what is due to them.

This was revealed by premier Phumulo Masualle in a response to questions posed by Democratic Alliance provincial leader Athol Trollip.

The news came as a shock to some of the contractors, who spoke to the Daily Dispatch yesterday.

In June the Dispatch reported that the district municipality had run out of money to fund its infrastructure programmes. Construction companies contracted on some of its infrastructure projects were told to leave the sites and not carry out any new work.

Masualle said the contractors would probably be paid in March next year when the Municipal Infrastructure Grant (MIG) was received from the National Treasury.

“The situation was communicated to affected companies/ contractors who have agreed to either suspend works until the end of March or continue, with the provision that they receive payment at the end of March when the next MIG tranche is received from National Treasu he said.

Contractors spoken to at the time alleged that the municipality had used most of the MIG funds to advance Siyenza’s payments for the project, hoping to recover the funds from the Development Bank of Southern Africa.

This included two advance payments totalling a little more than R90-million given to the company before it had even started work. Siyenza entered into a contract with the municipality in November last year but only started work in January.

The first advance payment, in September, amounted to R31million. In December, it was paid R63-million and R19-million was paid at the end of January this year.

National Treasury spokeswoman Phumza Macanda said the MIG funds were disbursed three times a year – in July, October and March.

A contractor who spoke to the Dispatch yesterday on condition of anonymity said: “This is totally unfair, there is no justice in all of this. We have accumulated debt and we are feeling the pressure from people that we owe and our workers. We are requesting intervention from national government.”

The municipality’s troubled R631-million sanitation project came to a halt about five months ago when it cancelled the contract with the main contractor Siyenza Group.

The sanitation tender with Siyenza was terminated when it emerged that tax clearance documents submitted to Misa (Municipal Infrastructure Support Agent) for a similar project in the Northern Cape had not been issued by the SA Revenue Service. —

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