PMB tourism hub fiasco

2012-10-01 00:00

TAXPAYERS may have to pay more for a R30 million landmark Pietermaritzburg tourism hub, which now stands abandoned as the municipality and contractor fight over money.

The building, situated in the central business district, has been abandoned by Indo Contractors, and both parties are blaming each other.

The Msunduzi Municipality said it had terminated the contract after Indo Contractors absconded, while the company denied this, saying construction on the site had been disrupted due to outstanding payments totalling R1,2 million.

The Witness understands that the municipality had paid the company R15 million for the work already completed.

The provincial Department of Co-operative Governance and Traditional Affairs (Cogta), which funded most of the project, said it was not aware of the cancellation of the Indo Contractors contract because they had not been briefed by Msunduzi Municipality.

“We know that there are delays with construction but we want to ensure that the building is completed within the required timeframe,” said Cogta spokesperson Lennox Mabaso.

Msunduzi municipal manager Mxolisi Nkosi said the decision to terminate the contract was based on the fact that there was no work being done on the site.

“I became aware of this two weeks ago that the work had stopped and I tried contacting Indo Contactors because I wanted to persuade them to continue with work,  but my calls were not answered,” he said.

He confirmed that the matter was discussed at an executive committee meeting two weeks ago. “We have referred the matter back to supply chain management to procure services of another company that will complete the work and on completion we will then calculate costs involved to determine if we incurred any losses so that we can recover those funds,” he said.

The Witness understands that the construction should have been completed by August but due to delays November was projected to be the completion date, but the latest developments now made it unclear when the project would be completed.

Indo Contractors’ managing director, Dorian Garvie, denies that they have abandoned the site or absconded. “Contrary to the terms of the contract, the municipality forcibly removed our staff from the site on 14 September 2012. Such action on their part was entirely unlawful,” he said.

Garvie said they had referred the matter to their attorneys.

“Unfortunately payment was delayed on a number of occasions throughout the contract, which resulted in work stoppages and various contractual claims.

“This contract experienced problems for a variety of reasons, including long overdue payment relating to adjustments to the contract value, standing time claims and a variety of variation orders on this project, totalling approximately R1,2 million,” Garvie said.

Nkosi said he was unaware of Indo Contractors’ legal action against the municipality to challenge the termination of the contract.

He denied claims that there were late payments. “The company never submitted any reports about late payment or even lodged a complaint. We do get such reports from other contractors,” he said.

About construction workers being removed from the site, Nkosi said Indo Contractors deserted the site without informing the municipality about any challenges they were facing. He alleged that the company then returned and tried to remove building supplies on site, which the municipality “didn’t allow to happen”.

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