The country’s newest car manufacturer – BAIC SA – has shifted blame onto its main contractor for the indefinite strike at its R11bn Coega plant due to nonpayment, saying it has already made payment but the contractor is failing to release the funds.
For little over a week, construction at Beijing Automobile International Corporation SA has been moving at a snail’s pace as all SMMEs have vacated the premises in the Coega Special Economic Zone due to the nonpayment.
Mandla Mpangase, the spokesperson for BAIC SA and the Industrial Development Corporation (IDC) – which represents both the SA government and Chinese investors – said BAIC SA, as project owner, had made its latest progress payment to the main contractor, Beijing Industrial Designing and Researching Institute (BIDR), on September 4.
Luvuyo Popo, president of the African Chamber of Business, which represents the majority of the about 40 SMMEs, said he was unaware of any payments made and, even so, it could take up to two months for payment to be effected.
Mpangase said the responsibility fell on BIDR as the main contractor implementing construction of Phase 1 – which included the prompt payment of all SMMEs.
However, he said, delays were to be expected.
“It is not uncommon for a project of this magnitude with multiple contractors working on site to experience delayed or late payments,” he said.
“These may be due to numerous reasons, including possible contractual disputes, contractors not submitting correct paperwork on time, and possible disputes over the certification of work between the engineering team, main contractor and specific subcontractors.
“However, BAIC SA does not condone the late payment to contractors.
“We are, as project owner, engaging with affected stakeholders to have this matter resolved as soon as possible.”
Popo said to the best of his knowledge none of the SMMEs had received payment.
In some cases, subcontractors had been waiting for up to four months for payment – and they would remain on strike until they had been paid.
“It is surprising to hear they have made payment to BIDR because I have not heard anything of the sort,” he said.
“One needs to remember that all of these big monetary decisions are made in China, where the IDC chose to put our South African rands, and just to get that type of money transferred has in the past taken up to two months.
“[Engineering consultant] Uhambiso decided to complicate the issue by appointing companies and agencies at exorbitantly high prices for jobs that could have been handled by local contractors at half the cost.”
Uhambiso Consult is the principal consultant for the BAIC SA project design and project supervision.
Mpangase said work had not stopped at the site – aside from a few subcontractors who had opted to suspend work until contractual issues were resolved – but no other contractors besides China State Construction Engineering Corporation were on site on Friday.
BIDR failed to respond to requests for comment.