Interest on late payments nears R92m

THE GAUTENG Department of Health has admitted that it has paid more than R5.6 million on interest alone for late payment for goods and services to only two service providers doing business with it.

The department now has an outstanding debt of about R92m for similar offences on late payment for last year alone. In this case, just four service providers are owed R92m.

Gauteng MEC for Health, Dr Bandile Masuku, revealed these figures in his written reply to questions by the DA’s spokesperson on health, Jack Bloom. Bloom had asked Masuku to provide details regarding interest accumulated because of his department’s late payments between January and October last year.

In his response, the MEC said his department had paid a total of R5.6m.

Masuku said that court orders, late payment of interest-bearing accounts and infrastructure-related matters accounted for the high amounts paid by the department.

He said the department currently owed R90.6m in late payments and R1.2m for court-ordered payments.

Despite these shocking revelations, Masuku said the department was still committed to settling all its obligations within the prescribed period of 30 days.

Masuku’s admission and reaction irked Bloom. “I am concerned so much is owed to the disputed Telkom V Block contract, which has been mired in allegations of corruption that need to be resolved soon. It is also shameful that R1.2m is owed for interest on overdue, court-ordered payments,” Bloom said.

“Better financial discipline is needed to ensure that all accounts are paid in time.”