Nelson Mandela Bay economic development boss Anele Qaba is demanding answers from the companies hired to manage the R21m work packages allocated to SMMEs in December.
This comes as Finecorp Trading 113 and JK Structures released a joint statement this week saying they had signed a cession – a legal act of transferring responsibilities – to two other companies to manage the work packages to clean drains around the city.
But Qaba said the municipality only had a contract with Finecorp Trading 113 and JK Structures and they would ultimately be held responsible for any wrongdoing.
“I emphasised at the time that any claim made when no work had been done or any funny business would lead to the auditing and action against them as they are the ones contractually appointed by the municipality,” he said.
Qaba said the report should include a list of all SMMEs hired, the areas they worked in, proof the work was done, names of the people who own the business and the amounts paid.
“If anything is not in sync with the terms in relation to the implementation of the project, they must therefore account,” he said.
On Monday, hundreds of business owners gathered at the Port Elizabeth City Hall and Uitenhage Town Hall, claiming they had yet to be paid.
In December, 945 SMMEs were allocated work packages – totalling R21m – following a council decision.
The municipality used Finecorp Trading 113 and JK Structures, which were already on its supply database and had existing contracts with the city for drain-cleaning work – to manage and pay the SMMEs.
JK Structures is owned by Cameron Klopper while Justin Carelson owns Finecorp Trading 113.
Their joint statement reads: “JK Structures and Finecorp Trading 113 had absolutely no involvement in the screening, management and payments of the SMMES.
“We were not paid any funds by the municipality on this contract.”
A cession was signed on December 13 2018 with Sholden Lukwe Construction and Mbumba Project Managers, according to documents seen by The Herald. The documents further show that Sholden Lukwe Construction and Mbumba Project Managers were each paid more than R11m on December 21.
This money was then meant to be paid to the 945 SMMEs.
“From the outset, our companies made it clear that we would not want to be involved in the screening, managing and payment of the SMMEs,” the joint statement reads.
“We were told by the officials that these duties and responsibilities would be done by the two appointed submanagers [Sholden Lukwe Construction and Mbumba Projects]. We then resolved with the municipality to have a cession signed with the two affected companies, which was approved by Qaba.
But Qaba hit back, saying a cession to the sub-contractors did not relinquish Finecorp Trading 113 and JK Structures from their contractual obligations with the municipality.
“They remain responsible, cession or no cession.
“What they are saying in my view is ridiculous and it comes from people who seem to be running away from accountability and who are trying to pass the buck.”
He said the municipality had no legal standing against the sub-contracted companies brought on board by the cession.
“The decision to enter into a cession and agreement with such companies was entirely that of the main contractors and not the municipality.
“I find their statement defensive and trying to shift their contractual responsibility. This is all absurd and they will have to answer on Friday.”
Mbumba Project Managers project manager Vusi Rapiya said it was allocated 424 SMMEs and only 13 were not paid in December due to banking issues.
“We contacted the leadership of the SMMEs and notified them about the problem with the banking details. We received new banking details and made the payments.”
He said the SMMEs were paid slightly less as the municipality deducted a small portion which was a discount for making the payment earlier.
“This was to ensure the SMMEs were paid in December. We discounted this amount from the payments.”
Sholden Lukwe Construction managing director Zolani Lukwe did not respond to telephone calls or text messages sent to him.