Cash-strapped small businesses claim Msunduzi refuses to pay them

2015-08-27 09:05

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SMALL electrical businesses contracted to the Msunduzi Municipality are on the brink of shutting down because the municipality has allegedly been withholding payments to them since April.

Some 13 businesses in Pietermaritzburg, who declined to be named, said they have “no idea” why the municipality refuses to pay them and consult with them.

“We as small businesses are collapsing and we are now begging for payment. They keep promising to pay us soon. But how soon is soon? One of the senior managers we approached at the municipality said they were not happy with our work and that is why we will not be paid,” said an owner of one of electrical companies contracted to the municipality.

However, Msunduzi Municipality denied that payment has not been made since April, with acting spokesperson Nqobile Madonda saying payment has not been made since June 2015 “as there were some internal processes to undertake”.

“The internal audit unit of the municipality is conducting a forensic investigation into allegations of irregularities regarding electricity contractors and has informed contractors that were found to have committed some irregularities through the supply chain management processes [of this],” said Madonda.

The electrical companies are contracted to conduct maintenance, disconnections and reconnections, street lighting and meter readings.

The business owner said he was not called in by the municipality and informed that he was being investigated but was rather told that he would not be paid due to shoddy workmanship.

Their contract began in September 2013 and the contractors say “the excuse” of shoddy work is unacceptable as the matter should have been brought up earlier in the contract.

“Our contract is almost at its end and now the municipality are saying they have a problem with our work.

“If it was earlier in the contract then we would have understood, but not almost two years later,” he said.

The man said no payment from the municipality has resulted in some of his workers being on the brink of having their newly bought houses and vehicles repossessed and his business is close to closing down.

“The fact that we are not being paid definitely affects service delivery in the city. When payments stopped, I had to use my savings and go into my overdraft to pay my workers but now I have run out of money and am struggling to keep my business alive, let alone pay the workers,” said the business owner.

He said he was forced to sell some of his assets to ensure his business stays afloat.
Another electrical company business owner said he has been looking for work with other contractors like Eskom.

He said most days he drives around looking for work as he has no other option.
“The municipality refuses to consult with us. We have called many meetings with them but when we get there, the meetings are one-sided and it seems there is no way forward,” said the business owner.

Madonda said the reason payments had to be stopped for the investigation is to “ensure that the resources of the municipality are used effectively, efficiently and economically and that unauthorised, irregular or fruitless and wasteful expenditure and other losses are prevented”.

“The municipality must be allowed do its work as required by the MFMA and in doing so will continue to communicate with the affected contractors through the already established structures,” said Madonda.

Read more on:    msunduzi municipality  |  pietermaritzburg  |  electricity

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