Builders engage Treasury on debt woes
Court class action postponed
MASTER Builders South Africa (MBSA) has postponed a planned class-action court application against the government to recoup billions of rand owed to its members for work done for municipalities, provincial and government departments and state-owned enterprises to engage the National Treasury in a last-ditch attempt to resolve the problem.
A meeting between MBSA and officials from the office of the chief procurement officer at the National Treasury took place on Tuesday to discuss the issue.
Roy Mnisi, the executive director of MBSA, a leading organisation in the building and construction industry, said yesterday that its members had a total of about R5.5 billion due for payment by government entities that had been outstanding for more than 90 days, despite regulations that required the government to pay contractors and service providers within 90 days.
Mnisi said about half of the MBSA’s 4 000 members had money owing by the government that had been outstanding for more than 90 days, but last year the amount owing was about R6bn.
He said the purpose of the meeting with the National Treasury was to come up with ideas on how to deal with the problem before it escalated into court action.
Mnisi said the problem had been discussed at length with National Treasury officials and it would not be necessary at this stage for MBSA to proceed with the class action court application proposed by MBSA members.
“They took it very seriously and as a result we were of the view that we should give them an opportunity to work on the matter,” he said.
Mnisi said it was agreed that MBSA would submit to the National Treasury the specific claims submitted by its members to municipalities, government departments and state-owned enterprises that had been not been paid and been outstanding for more than 90 days, to enable the National Treasury to deal with the issue.
He added that some government departments and municipalities went out to tender when they did not have the budget to pay for these products or services, which was one of the causes of the delayed payments and a contravention of the Public Finance Management Act, and for municipalities, of the Municipal Finance Management Act.
“We raised that point