Subcontractor’s pain: R290 000 owed
FOR ALMOST a year young businessman Mantsiri Mabala has been awaiting payment for services his company, Sebaka Engineering, rendered as a subcontractor in a Durban municipal project.
Mabala is among a growing number of subcontractors who face severe challenges in the face of late payments. The South African Small Business Institute (SBI) has warned the issue is negatively impacting on the growth of the small business sector in South Africa.
Giving background to his case, Mabala said his company Sebaka Engineering entered into an agreement with Mandlethu Projects to provide rotary core drilling and geo-technical investigation for the provision of water and sanitation to informal settlements in Luganda, Pinetown last year.
According to Mabala, this service agreement arose from a municipal contract that Mandlethu Projects has with ethekwini Municipality and forms part of the massive roll out of water provision and ablution facilities to be identified at informal settlements as well as schools in Durban.
The project was initiated to address the sanitation provision imbalances within Durban, in line with the National Development Plan’s vision of access to hygienic sanitation to all.
Mabala said Mandlethu whose owner is businessman Phila Mahaye only paid him a deposit of R52 000 and has never paid the balance of R294 000.
“When he (Mahaye) was still taking my calls, he used to say the municipality had not paid him. After the municipality paid him, he ignored my calls. I went to his office and I spoke with his project manager because he was not there.
“I never received any payment. A letter from my lawyer was ignored and my next move is to take him to the high court,” added Mabala.
Mahaye has not responded to any queries from the Sunday Tribune.
The issue of companies contracted by municipalities not paying subcontractors came up in this year’s Budget debate in Parliament, and has also been red-flagged by the SBI.
SBI spokesperson Siki Mgabadeli said the issue of late payments had become one of the major financial challenges facing the small business sector.