Tshwarelo Hunter Mogakane
Pretoria - Small business owners subcontracted to refurbish intensive care unit (ICU) beds and high care units for Covid-19 patients at Kopanong Hospital in Vereeniging, say they are drowning in debt after the government failed to process their outstanding payments.
The infrastructure division of the Gauteng Department of Human Settlements and Infrastructure Development contracted a company named Condocor, which then subcontracted the work to small businesses.
Now, six of these businesses – owners of which include two individuals with physical disabilities and two women – have been facing the possibility of closing, due to mounting debts and lack of working capital.
The Kopanong ICU project began in August 2020, but was brought to a halt when the contract was terminated in February 2021. The termination of the contract affected the subcontractors, who had borrowed money to do the work. They were instead only paid 40% and left with working material piled up in their workshops.
According to Sam Fihlani, who represents the subcontractors, they are owed R11 million and nobody seems to be willing to resolve their problem.
He said the subcontractors had planned to resolve the matter amicably after leaders of the department distanced themselves from the subcontracts, stating they only had a contract with main contractor Condocor.
A number of letters were written to the department with the aim of getting some form of intervention. In one, Fihlani told department leaders they should do something to help small business owners penalised for Condocor’s shortcomings.
“We would like to bring to your attention that these subcontractors are in serious financial predicaments. They are indebted to loan sharks, and are constantly being harassed and threatened. Material suppliers are breathing down their necks as they have failed to pay their accounts, and this has led them to being blacklisted by the credit bureaus,” wrote Fihlani.
He told the department subcontractors were also unable to sell off material they bought for the project.
“Some of them are sitting with specialised/customised material that was ordered for the Kopanong Project and it cannot be used on other projects.
“Also take note that two of the subcontracting companies are owned by physically challenged individuals and others are women-owned. Why are we subjected to this bad treatment? We view this as government officials failing small businesses,” he said.
Fihlani said the subcontractors engaged the main contractor in order to amicably resolve the outstanding payments, but were informed there was a pending arbitration case between the Condocor and the department.
He said on further investigation, it was found Condocor owes the department money, not the other way round. This meant the subcontractors should forget about ever being paid for the work they did. Department officials eventually met the subcontractors after they warned they would remove the installations made at Kopanong.
“We met the department’s senior managers on August 10. We were promised the provincial government would write a letter of demand to the main contractor with an instruction to pay and settle the outstanding payments of the small businesses within 14 days from receipt of the letter.
“We were told failure to settle these outstanding payments would result in a decision whereby Condocor and its directors would be blacklisted by the Treasury, whereby they will no longer be eligible to participate in national, provincial and local municipality tenders,” Fihlani told Pretoria News. To date we have not received feedback.
Department spokesperson Victor Moreriane and Condocor project manager Tendai Nyasha did not respond to questions on the matter by time of going to press.
Pretoria News