Baic SA secures funds to curb further project delays

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An urgent meeting earlier this month in Beijing, China, between the Beijing Automotive Industry Holding Company (Baic) and the Industrial Development Corporation (IDC) to get extra funding for the beleaguered R11 billion car manufacturing project might rescue it from further site closures.

In an effort to resolve the problems of non-payment of big contractors, a meeting of senior officials was called to resolve the issue “once and for all”, Uhambiso Consult managing director George Gerber said in an exclusive interview.

Uhambiso is the main consultant to the Coega-based project.

However, Gerber said, payments for this month’s work would be late as the extra funds were not yet available.

Baic SA – a joint venture between Baic and the IDC, which respectively own a 65% and 35% stake in the project – has seen numerous work stoppages since its inception three years ago.

“Yes, funding for the project was an issue. A meeting to help leverage more funding for the project had to be called last week in Beijing and was attended by senior Baic Group and IDC officials,” Gerber said.

“Now there definitely is going to be a change. More funding has been sourced. This will help alleviate the problems of non- or late payment of contractors.

"It is amazing that a project of this nature went through funding problems. The Beijing meeting agreed that more funding should be released for the project to go ahead without any more hiccups.”

He declined to reveal how much money had been released, but said it would be “enough” to finance the project.

Uhambiso said as matters stand all outstanding payments to contractors had been made except for WBHO, which is still owed a certain amount.

He could not disclose how much the construction company was owed.

A spokesperson for WHBO, who also declined to be named, said the non-payment of work done was heavily affecting the contractor’s cash flow.

Gerber denied allegations by big contractors that Baic SA was not communicating properly with them.

“All contractors were informed about the funding problems the project was facing and also kept abreast of what was being done to alleviate the problem,” he said.

IDC spokesperson Mandla Mpangase confirmed that a team of experts, including Uhambiso, was established to facilitate communication and good relations between big contractors; small, medium and micro enterprises; and the project owners.

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