Setting the record straight on the Kancane Kancane Premier’s Legacy Project
05 March 2013
The Office of the Honourable Mpumalanga Premier David Mabuza hereby wishes to set the record straight around the payment of the contractors who are involved in the Premier’s Legacy Project.
The Kancane Kancane Premier’s Legacy Project is the Premier Mabuza’s personal initiative of reaching out to those individuals whom for one reason or another have not been able to receive RDP housing allocation from government.
It is also aimed at the individuals whose situation has deteriorated to a point where it cannot be postponed nor delayed any longer. In the main, it pays attention to the elderly, disabled, orphans and widows from amongst us.
To date the project has seen the Premier build 147 houses which some have been handed over to the beneficiaries across the province.
Therefore, it is with regret that here has been a negative perception created around this project that the Honourable Premier is purposely not interested in paying the contractors and that he “pocketed” R3 million as paid by the sponsors of his legacy project.
We wish to state that the Honourable Premier is aware of the complaints by the contractors and he has personally intervened by interacting with the sponsor to expedite the process of payments.
A case in point, the recent houses built in Govan Mbeki Municipality, despite contractors submitting information that was not complete as per the sponsor’s request, they have since been paid 50 percent of what is due to them while a process to correct concerns raised by the sponsor on the documentation submitted is being resolved with those contractors affected.
It has however regrettably appeared that there have been a number of shortcomings from the side of the contractors which have led to their payments being delayed.
While the contractors were thoroughly briefed and updated on all processes to be followed to ensure smooth process towards payment of invoices, we have observed that for one reason or another, some procedures were overlooked.
Since the work happens within a local municipality, it is in the interest of the Premier that before any payment is effected on houses completed, that the municipal regulatory requirements in terms of building have been complied with and that the municipality has issued all necessary documentation to the beneficiary and to the contractors in their verification exercises.
These includes an occupation certificate, confirmation that the house billings to the beneficiary, proper account information for the purposes of billing the beneficiary going forward with all account reconciliations concluded.
After proper assessments by municipalities, documentation per contractor would further be submitted with invoice claims to the Office of the Premier per house completed.
The Office of the Premier would also conduct an internal assessment and verification exercise per claim submitted. These include physical site visits to verify information submitted often accompanied by the sponsor or independently.
These visits are often arranged on availability of the sponsor. Office of the Premier upon the verification process signs off against the bill of quantities, correct the claims if there is a need, and further inform the contractors of what payment they can expect based on the assessment. The Office of the Premier would send the invoices to the sponsors once they have been signed off.
Subsequently, the sponsor would verify CIPRO, check with SARS if contractors are VAT registered, and finally confirm the banking details. Whatever queries identified by the sponsors, they would be sent to the contractors via the Office of the Premier and the municipalities for rectifying.
It needs to be noted that another delay has been caused by the fact that some contractors have just recently submitted their paperwork for processing, while others have completed their work in time and it was a condition from the sponsor that all the houses needed to be delivered on time.
In an event where the deadline was not met by many of the contractors, Premier had to engage the sponsor on the challenges experienced and agree to a new deadline. It is in this context that the sponsor was not able to release money to less than 50 percent of the contractors who had already completed their work. Instead, contractors were given a chance to finish and then be paid in full for the work delivered.
Like in any project, if financial management controls are not tight, we could not have picked up that some contractors submitted invalid VAT Registration numbers, deregistered company details, while others incorrectly charged for VAT when they were not supposed to have done so in the paperwork they submitted.
Although situation differs per contractor, the delays have been necessitated mainly by such minor things.
The Honourable Premier has no interest whatsoever to delay payments for the contractors as he understands very well that small business rely on constant payment for the work done. On several occasions, the Honourable Premier has instructed the sponsors to fasten the process.
The Premier is currently in the process of concluding institutional arrangements with the sponsors in an effort to ensure that these disturbing and inconveniencing experiences do not occur again in future. This responsibility will in the future be taken over by the sponsor from day one and contractors will need to comply to all requirements from the sponsor before the first brick hits the ground.
To date most of the contractors have been paid at least 50 percent of their claims as received by the sponsors.
Through his interaction with the sponsors to expedite payments, the Honourable Premier is appealing and has assured the creditors that the contractors will definitely get their payments soon.
The Premier will shortly be calling a meeting with contractors to engage with them on future modalities surrounding the project to avoid reoccurrence of these inconveniences. We will keep you all informed of the date and venue for the meeting.
The Premier regrets any inconveniences that might have occurred for the contractors, however hoped that his Kancane Kancane Changing the Lives of the People for the Better Legacy Project would continue to enjoy a healthy and a beneficial relationship with the contractors.
Issued by Zibonele Mncwango
Spokesperson: Mpumalanga Premier
Tel: (013) 766 – 2453
Mobile: 079 491 0163
E-mail: zmncwango@mpg.gov.za
