Bhisho tots up R311m in unpaid bills to businesses

THE state owes about 5 500 Eastern Cape private firms more than R311-million for work done.

These details are contained in parliamentary responses given by former finance MEC Sakhumzi Somyo in response to a question from the DA’s Bobby Stevenson.

The turnaround period for paying suppliers is supposed to be 30 days from an invoice.

Somyo’s response shows that 2 836 companies had not been paid for more than three months, while 750 others had not been paid for more than two months.

A third category is 1 917 suppliers who have not been paid for more than 30 days.

Somyo’s response revealed that the worst offender was the department of health, which as of December 31 owed suppliers more than R220-million.

Second was the then public works department, which owed suppliers R50.8-million.

The office of the premier is another offender, with R13.3million in outstanding payments to companies for work done by the end of last year.

Stevenson said this was not acceptable, as it would feed into the high rate of unemployment in the province, as some of these companies would have to close shop if they remained unpaid.

The Dispatch has reported before on the failure of the provincial government to pay its creditors within the 30-day turnaround period and how it was crippling small businesses in the province.

Two months ago, we quoted provincial business formations saying the growth of small, medium and micro-sized enterprises (SMMEs) was shrinking by 40% every year as a result.

When Stevenson put the questions to Somyo, the then MEC said more than 7 200 businesses in the province were owed R466-million by provincial departments.

Even then, in that earlier report, the health department was the main culprit with 6 577 (just over 90%) of the outstanding invoices.

Stevenson said this week: “The department of health continues to show clear signs of general mismanagement and maladministration as it struggles to pay its suppliers with the fact that out of the total of 5 503 suppliers still owed in excess of 30 days, 3 476 of those suppliers fall under the department of health.

“Not much has been done in four months to prove otherwise.”

Other offenders are:

● Education department with R9.8-million;

● Sports recreation, arts and culture at R7.4-million; and

● Rural development and agrarian reform at R2.8-million.

“It is not acceptable that, at a time when unemployment is at an all-time high and small businesses are struggling to stay afloat due to an underperforming economy, the government fails to pay these businesses within the 30-day window period,” he added. —