Building of low-cost houses may be frozen

his workers in December.

Yesterday human settlements head of department Gaster Sharpley conceded his department “was having a cashflow challenge” and that the non-payment was due to “over-performance” by some contractors in the affected areas.

“Yes it is true that we have not paid some of these contractors. But we do pay our invoices monthly, and it is not true that they will be paid at the end of March.

“Some of these are huge projects and because of over-performance in some of these areas, more pressure is placed on the department’s cashflow,” said Sharpley.

Sharpley said their bill stood at R430-million in late November and that the department had since paid out invoices amounting to R76-million in November and R192-million in early December.

Various contractors who spoke to the Saturday Dispatch yesterday on condition of anonymity for fear of victimisation for future contracts, said they were told that the department’s coffers had run dry.

They claim they were told they would only be paid in April when the new financial year resumed.

As a result, many companies have failed to pay their labourers in December, while hundreds had to be laid off or face retrenchment in 2017.

Some of the contractors have even threatened not to return to site in January as they could not afford to continue working while still owed millions.

One contractor described the situation as “a crisis ready to explode”.

He said some of their invoices were more than 100 days old, in contravention of the Public Finance Management Act, which requires the state to make payments within 30 days of invoices being submitted and verified.

“This is a crisis faced by emerging and established contractors all across the province as the department is sitting with a cashflow problem.

“In our recent meetings with the department, we were told that the challenges emanate from the fact that they had not received the allocation they had asked for from the national government, hence the shortfall.”

The irate businessman said they were told to expect full payments by March.

Another builder – owed for more than 350 houses built in the Alfred Nzo district – said the situation was tantamount to fraud because the department awarded tenders while knowing there was no money to pay for them.

He said this has been happening for the second year in a row, an allegation Sharpley confirmed.

“We had to lay off many of our employees due to this, while our businesses are also severely affected.

“This is because we take up bank loans to do the work; loans which we then fail to settle, resulting in us accumulating much more debt in interest over unpaid loans,” he said.

Another contractor said the nonpayment “slows down our project