Ricochet News

ECape Dept of Human Settlements pays R255m of the R303m owed to contractors

Mar 16, 2017
ECape Dept of Human Settlements pays R255m of the R303m owed to contractors

Eastern Cape MEC for Human Settlements, Helen Sauls-August, has announced that after verifying and ensuring creation of value has taken place in the specific projects  the Department has settled R255 million of the outstanding R303 million due as at the 12th January 2017 when she responded to a House question in the Legislature.

The outstanding R48M will definitely be settled during new Financial Year  as will all other invoices submitted as at last payment run of the Department during March 2017.

Attempts to get additional funding from the National Department and Provincial Treasury were unsuccessful, hence any outstanding payments must be settled during new financial and they will be prioritized.

“We also send stern warning to contractors to remain within Project implementation plans and ensure we don’t exceed the targets set out on the project plans so that our output should ultimately match our expenditure. We do not want foundations and wallplates scattered across our Province but require fully completed housing units with certified FUR’s,” MEC Helen Sauls-August said.

The Department experienced a shortfall of R396 million as at the beginning of the current financial year which was due to the reduction in allocation by R176 million after the department had finalised its commitment for the financial year and the Province was subsequently only informed on the 28th January 2016.

The Department has throughout this period regularly communicated with all the affected contractors about the cash-flow constraints and also to notify them of the arrangements the Department is deploying to resolve the current situation.

The department has over the years moved from an era of under expenditure, poor workmanship into a   well-functioning engine producing quality homes. The over delivery on the set targets has also affected the cash flows of the department.

The MEC has also expressed her gratitude to all the contractors who put needs of the people first by continuing to work with the department during this period.

“We express our gratitude to all the patriotic contractors who have continued to work whilst we were attempting to find additional funding to pay them. We are also enforcing strict compliance from our inspectors on all projects to stick to the set targets so that we don’t find ourselves in this situation again,” she said.