Government non-payment threatens all builders
SANYATI has become the latest “victim” of the government’s notorious delayed payments. The listed construction group reported this week that its wholly owned subsidiary, Sanyati Civil Engineering and Construction, was applying, cap in hand, to be placed under business rescue because of long outstanding payments of R79 million from three provincial governments.
The most material amount owing is R43m by the Free State provincial government for the rehabilitation of 15km of road between Harrismith and Oliviershoek, a contract it awarded in April 2010, with the bulk of the project costs incurred by October of the same year.
At least two other listed companies, Basil Read and Raubex, have been affected by the road contract problems in the Free State, with tenders awarded to various contractors worth a total of about R4 billion believed to be part of a government-launched investigation into the value of road contract awards in the province.
Sanyati’s other claims include three separate local government matters in KwaZulu-Natal valued in total in excess of R30m, and R6m owing since December by the Limpopo provincial government.
The amounts owed to Sanyati have had a heavy impact on its liquidity, leaving the group unable to execute its R1.2bn order book at the end of February, leading to low activity levels on its site operations, an inevitable deterioration in margins and an inability to achieve project milestones.
Sanyati has been forced into discussions with potential joint venture partners to retain and execute the existing order book. The joint venture partners will be expected to provide the necessary working capital in return for a share of the spoils on completion of projects. Sanyati is now in the same boat as Sea Kay Holdings.
Treasury rules state that government debts must be paid within 30 days. There have been various reports of other large amounts owed by provincial governments that have been long outstanding. These late payments will also have repercussions for the sustainability of these businesses and the jobs that they have created.
If the government penpushers responsible for this mess are not held culpable soon, not only these big firms but downstream sub-contractors and suppliers will keel over as well, dunking a lot of jobs. Wage negotiations Can this be the winter of our discontent already? A storm is brewing quietly and
Sanyati has been forced into discussions with potential joint venture partners to retain and execute its existing order book.
wage negotiation meetings between the Independent Labour Caucus (ILC), Cosatuaffiliated unions in the public service, and government negotiators this afternoon will determine whether the strike season will unleash its fury.
At their last talks, the government moved to a 6.5 percent increase, declaring it the final offer, while the unions have come down from 8.7 percent to 8 percent.
Chris Klopper, a spokesman for the ILC, said yesterday that the employer had drawn a line in the sand and said it would declare a dispute if there was no agreement. In law, this means workers are being threatened with a lockout but whether this can be carried out remains to be seen.
In his Budget speech in February, Finance Minister Pravin Gordhan said only 5 percent had been allocated for wage increases in the public service. So where has the extra money now on offer come from?
Regardless of the answer, one must stress that there should be restraint on both sides. The last public servants’ strike in 2010 was an embarrassment to the country. It was violent and very sick patients were left unattended in hospitals. One hopes there will be no repeat of that this time.
The unions and the ILC represent 1.3 million public servants. The employer is now offering R900 a month as a housing allowance, up from R800 a month, with a condition that the adjustment be in effect for six months of this year only.
The employer also wants to impose a multi-term agreement of three years, while the unions are demanding a singleyear agreement.
On another front it looks promising. Employers in the textile and leather sectors have formally tabled wage increase offers of between 4 percent and 7.5 percent, according to the Southern African Clothing and Textile Workers’ Union. Set-top boxes Poorer households and rural children will get a “one-upmanship” on matters internet with the inclusion of the “return path” function on subsidised set-top boxes (STB).
This is quite a milestone in moving the country towards universal internet penetration and easier communication. The 5 million households to receive subsidised STB decoders may not have seen a computer before but even poor households own television sets.
As the government will subsidise 70 percent of the STB cost, poor households will be left to pay about R210 if the standard decoder costs R700. Although it is arguable whether the poorest of the poor can afford this, it is safe for the Department of Communication to say that those who can afford a television set can start saving the 30 percent they will have to pay.
Roy Kruger, the adviser to the minister of communications, says the SA Post Office has been identified as the distributor of the subsidised boxes while everyone else will buy their boxes at retail outlets.
A subsidy will be given to poor people with South African ID documents and a fixed residential address. This will be tricky for those living in informal settlements and rural areas. But Kruger says a letter bearing the stamp of a local chief, an affidavit from the police or letters and signatures of three local authorities will be accepted.
Once the application is approved the post office will give a person the STB decoder, an antenna and an installation voucher. It will then phone the installing agent and book the installation on the customer’s behalf, while a post office employee will accompany the customer home to see the television and the house’s exact location.