Gauteng govt settling debts

2009-11-12 22:08

Johannesburg - The Gauteng provincial government has made R1.6bn in payments to service providers which had been in arrears, Premier Nomvula Mokonyane said on Thursday.

Late payments to service providers have been an issue that Mokonyane has taken up since her inaugural speech in May.

The R1.6bn represents a substantial portion of the R1.7bn in outstanding debts to service providers identified by the province. The remainder of the debt will be paid by the end of the year, Mokonyane told reporters at the Gauteng Economic Recovery Summit held in Ekurhuleni.

However, Gauteng spokesperson Thabo Masebe cautioned that further investigations had uncovered more debt than previously thought.

"Due to systemic problems some issues were discovered," he said.

"So we owed a lot more than the R1.7bn."

Remaining payments will be made

Masebe said a full report would be available in the coming weeks. Despite this setback, he said the remaining payments would still be made by the end of the year.

A businessman at the summit agreed that the situation had improved. Commercial Silkscreen Printers director of business development Frans Moabelo said he had not applied for government tenders in the past due to late payments.

"I stayed away from government. I can't carry a million rand contract for three or four months."

"If I carry it on an overdraft the bank is going to charge me interest... my profits will go down the drain," said Moabelo.

"I'm a small businessman, I'd go out of business."

Moabelo blames "bad management" for the length of time it takes service providers to be paid.

However, he said things are changing in the provincial government. Moabelo said his company intended to apply for government tenders next year.

More public spending

The summit was held to bring business, trade unions, and civil society organisations and government together to discuss the economic situation in Gauteng.

"We partnerships between the state and government," said Business Unity SA CEO Jerry Vilakazi.

Gauteng economic development MEC Firoz Cachalia also called for more co-operation and urged more public spending to stimulate the economy until a recovery was certain.

"We have good reason to be rationally optimistic," said Cachalia.

"The risk is to withdraw these incentives too soon."

Mokonyane said public spending had already saved jobs. She said R152m had been spent on the auto-parts manufacturing and has saved 47 000 jobs.

"It's not what we planned for but we found a fire and we brought the engine to put the fire out," said Mokonyane.