Municipality sued for R7 million

2010-04-14 00:00

UMTSHEZI local municipality has been served with court papers by the sheriff of the court last Friday, ordering the payment of more than R7 million to CSM Consulting Ltd.

Failure to make payment arrangements would have led to the sheriff attaching movable assets from the civic building and bank accounts, if need be, to recover the money owed by the municipality.

This emanates from the municipality’s failure to pay the company for contract work to renovate Ikhwezi Hostel in Estcourt.

The project, funded by the Housing Department, was initiated in 2003 and involved renovating the hostel from scratch.

A source at the municipality said there was a lack of financial control if the court has to issue summons to make payment for services provided.

Rumours were doing the rounds yesterday that the town hall or the civic building had been attached by the sheriff of the court due to the non-payment of the amount to CSM.

The company’s legal representative Julian von Klemperer confirmed that his client, CSM, has won a court order forcing the municipality to pay the millions.

“A court judgment was given in favour of my client against the Umtshezi municipality for more than R7 million. The sheriff was sent with a warrant to demand payment, and failure to make arrangements would have led to the attachment of movable assets and probably bank accounts to recover the money,” said Von Klemperer.

He said his client has been waiting for about six months for the payment.

“Notices were served to the municipality, but they were ignored. They didn’t even offer an explanation for their failure to pay, and we sued. Even when the judgment was given in favour of my client, the municipality didn’t defend it,” he said.

Municipal manager Nontlantla Njoko dismissed rumours that any municipal building was attached, stressing that municipal buildings belong to the municipality.

However, she conceded that there were problems between the municipality, the Housing Department and CSM.

“There was a little dispute between the municipality and the company about payment, but we have since resolved it.

“The housing department, as the funder of the project, has its own issues with the company and I cannot divulge any information on that as the two parties are dealing with the matter,” said Njoko.

Umtshezi Mayor Alpha Shelembe echoed Njoko’s statement about the issues between the two parties.

He said the department wanted CSM to explain certain issues with regard to the renovations.

The company has been paid but little was done on the site, said Shelembe.

Democratic Alliance councillor in the area, LeRoy Gericke, said they were shocked to hear about the court order, as this issue has never been tabled to council.

By the time of going to print, the department could not be reached for comment.

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