Government debt of R303m leads to business chaos

The Eastern Cape Department of Human Settlements owes contractors who have built low-cost housing in the province a whopping R303-million.

According to the DA, the massive debt, which is far in excess of 30 days, has left many small businesses floundering and led to the losses of hundreds of workers due to lay-offs in a situation the party has labelled chaotic.

South African legislation states that businesses that have completed work for the government be paid within 30 days, yet there are invoice payments that are more than 90 days outstanding for Alfred Nzo, Chris Hani, Joe Gqabi and OR Tambo municipalities.

The DA has called on Human Settlements MEC Helen Sauls-August to address the backlog in payments which include: R81-million in the Alfred Nzo Municipality; R73-million in the OR Tambo District Municipality; R36-million in the Nelson Mandela Bay Metro; R11-million in the Buffalo City Metro; R7-million in the Amathole District Municipality;

“It is unfair to contractors, employees and recipients of housing that the department is conducting its affairs in this chaotic manner,” DA MPL Sanele Magaqa said.

In answer to Magaqa’s parliamentary question for written reply in the Eastern Cape legislature, the department replied that it had experienced a shortfall of R396-million at the beginning of the financial year.

The department promised to prioritise payments to outstanding invoices in the 2017-18 financial year.

2 thoughts on “Government debt of R303m leads to business chaos

  • March 14, 2017 at 2:14 am

    No education = no idea, promotion on struggle credentials will never benefit any society!

  • March 13, 2017 at 3:18 pm

    why is any one surprised by this. it would appear that the ANC do not know how to keep their side of a bargain/contract. what is the bet they are going to try and lay this one at the feet of the D.A.


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