Payment battle

Goba-Gcora Construction took the Nelson Mandela Bay municipality to court in 2009 after it did not receive the millions it believed it was owed.

The case between GobaGcora Construction and the municipality – with the public protector listed as an interested party – was concluded in September 2017.

Company owners Sipho Gcora and his wife, Khuselwa Goba-Gcora, took their case to then public protector Thuli Madonsela when they did not receive full payment for services rendered, with Madonsela estimating the amount due at between R28.5m and R53m with interest.

Goba-Gcora Construction had been subcontracted by WK Construction – which was appointed by the metro to construct RDP houses in KwaNobuhle – to build 1,435 houses, but the money paid over to the metro from the provincial human settlements department for the project had not been paid to them in full.

However, the municipality said in court papers that all the money had been paid over to the main contractor.

According to Madonsela’s report, the “alleged maladministration of the municipality” in this regard had “allegedly resulted in the complainant suffering prejudice”.

The metro had previously stated there was no direct contract between it and Goba-Gcora Construction.

Judge Jeremy Pickering ruled that Madonsela’s recommendation that the metro pay the deficit to Goba-Gcora be set aside.

Pickering conceded in his judgment that the municipality had acted irregularly – as pointed out in Madonsela’s report – by awarding the contract to WK Construction as the company was not registered with the National Home Builders Registration Council.

He accepted some of Madonsela’s recommendations, including that the metro had to put specific systems in place to regulate the effects of the deviation and that its officials had to be educated regarding the Municipal Finance Management Act.

Pickering said city manager Johann Mettler had said this would be done.

“In future, any contractor who is appointed will have to meet the criteria for home builders,” Mettler said at the time.

“We made a technical error that was not linked to the losses incurred [by Goba-Gcora], but it cannot happen again.”