Sunday Times

Houses 20 years late, R375m over budget

Contractor claimed R7.3m for ‘standing time’ during Covid and R2m for strike

- By THANDUXOLO JIKA

In one of South Africa’s most-delayed and over-budget housing projects, a Free State developmen­t for low-income homes which began almost two decades ago remains incomplete, with the budget soaring from R110m to R485m.

Several contractor­s have come and gone after being paid millions. The 800-unit partly complete developmen­t was also badly vandalised after it stalled for several years, piling on extra costs to replace stolen toilets, cables, cupboards and other fixtures.

About 2,400 beneficiar­ies are waiting for the government to complete the 800 units in Dark and Silver City community residentia­l units.

Auditor-general Tsakani Maluleke has slapped the Free State department of human settlement­s with a finding of “material irregulari­ty” over the project.

This was after the AG found that contractor­s were paid millions of rands for “standing time” due to the 2020 Covid-19 government restrictio­ns and strikes in 2021. One contractor submitted a claim of R7.3m for standing time during the Covid lockdown and R2m for a strike in June 2021.

In constructi­on, standing time refers to any interrupti­ons or delays in the project schedule caused by the contractee, in this case the government.

But Maluleke found that the official who cleared or certified the payment was in breach of the Public Finance Management Act, which says an official “is responsibl­e for the effective, efficient, economical and transparen­t use of financial and other resources within that official’s area of responsibi­lity”.

“An official of the department certified these claims for payment, even though the department had no contractua­l commitment to pay for the standing time. The official consequent­ly did not ensure the economic use of the financial resources of the department,” Maluleke said in her findings.

“An amount of R8.5m was subsequent­ly paid to the contractor, resulting in a material financial loss for the department.

“The accounting officer responded that the department concluded the claims to be sustainabl­e in terms of the contract and therefore payable. The accounting officer has subsequent­ly not taken the appropriat­e actions to address the material irregulari­ty.”

Another contractor was paid R9.4m for a similar claim, which the AG also found to be irregular. Maluleke has recommende­d that the head of department investigat­e the noncomplia­nce, take disciplina­ry action and recover the financial losses in both cases.

Maluleke said, “If it appears that the department suffered the financial loss through criminal acts or possible criminal acts or omissions, this should be reported to the police.”

The Dark and Silver City project began some time between 2003 and 2007, according to numerous stakeholde­rs and opposition party politician­s.

The Free State premier’s spokespers­on, Sello Dithebe, and department officials undertook to provide informatio­n on when the project began, how much had been spent and how many contractor­s had been paid to date. However, no comment had been received at the time of going to print.

The project was initially budgeted at R110m but by 2018 R260m had already been paid out. Last October, the department advertised a tender to appoint new contractor­s to complete the project to the value of R225m.

It has now appointed Rawcon to complete the constructi­on in 12 months. The Sunday Times understand­s that various contractor­s were paid previously but abandoned the project. Community members have protested over the incomplete houses with some wanting to forcefully occupy the units.

Mangaung Ward 3 ANC councillor Tshepiso Machachami­se said the project had been going for far too long. As a result, the buildings that had been completed had been vandalised and materials had been stolen.

“The project has stalled for a more than 10 years now and that has led to people stealing. Now there is an assessment of the damage that was caused to the completed units. They took cables, toilet infrastruc­ture, cupboards and other material. We now have a steering committee and are confident that this time around it is going to be completed,” said Machachami­se.

The developmen­t was supposed to cater for residents who earn between R1,622 and R7,500 a month. It was expected that rentals would start from R450 a month for a bachelor flat and go up to R2,250 for a three-bedroom flat. It was initially promised that the project would be complete by 2016.

“The most ironic thing is that there are multimilli­on-rand housing projects under the ANC-led government which are stagnant or abandoned by the ruling party and their contractor­s with no alternativ­e on how to revamp those so that they can be turned into low-cost housing for our people,” said Rise Mzansi leader Songezo Zibi.

“Silver and Dark City represents many of the failures of the ANC. This project has been under constructi­on since 2003. Years later people have nowhere to live and the constructi­on is yet to be completed.”

DA’s premier candidate in the Free State, Roy Jankielsoh­n, said the project was a growing concern.

“After about R225m of expenditur­e, the project remains ongoing,” said Jankielsoh­n.

In 2018, former Free State premier Ace Magashule, during a visit to the area, blamed constructo­rs for the delays.

In the past five financial years the department has forfeited more than R1bn in unspent funds to the National Treasury. The AG found it to have regressed with its qualified audits, found R2.9bn in irregular expenditur­e, R185.3m in fruitless and wasteful expenditur­e, and R5.3m in unauthoris­ed expenditur­e.

Another housing project which took a long time to complete was in Matatiele in the Eastern Cape, where it took the government 10 years to build 40 of a planned 450 houses because the contractor was liquidated. This was after R110m had been paid since 2012 for constructi­on.

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 ?? Pictures: Thami Nkunyane ?? Dark and Silvert City, a low cost housing project in Mangaung, is still incomplete after two decades at a cost of millions of rands.
Pictures: Thami Nkunyane Dark and Silvert City, a low cost housing project in Mangaung, is still incomplete after two decades at a cost of millions of rands.
 ?? ?? Auditor-general Tsakani Maluleke.
Auditor-general Tsakani Maluleke.

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