ESP Project Pends As Companies Row Over P1.3m
Bame Piet | Monday July 31, 2017 16:35
The two companies are at loggerheads over a P1,149,487.50 payment pending since April 2017. The P23 million project financed under Economic Stimulus Programme (ESP), commenced last August and a dispute ensued early this year when the two companies could not agree on the arrangement of the payment.
At the centre of the dispute is whether the client, Ministry of Land Management, Water and Sanitation Services should directly pay the contractor, Tshepho Tile (Pty) Ltd for the works done, an arrangement that was applied in a previous payment.
According to the consultants, Regicam Enterprises (Pty) Ltd, officials at the ministry have suddenly become hostile to them, something that they blame on the delayed payment. Project manager, Kabelo Moakofi said he was shocked when minister Prince Maele, paid a surprise visit to the site without informing the consultant and the village authorities.
“We were only told about the meeting at the 11th hour and we could not attend because we had other commitments. It was after the site visit that the company abandoned the site,” Moakofi said.
He said that ever since the minister’s visit, the relationship has soured to a point that the ministry is withholding payment and never responds to their correspondence. Normally, he said, the client would pay within 21 days of submission of claim, but this time there was neither payment nor any correspondence to explain the delay.
Later, in May the consultant wrote a letter to the ministry to release the payment, but there was no response. After another letter on June 12, the payment was ultimately approved on June 14.
However, the ministry has said it only needed clarity on the exact works done up to March 2017, hence the delay.
“The assumption is that the request is for payment of works done by Regicam Enterprises (Pty) Ltd and Tshepho Tile Projects (Pty) Ltd. You will recall that we agreed in December 2016 that any payment due to both of you should be confirmed and countersigned by affected parties specifying how the transaction should be split,” a letter from Director, Kaboyamodimo Raitoko written on July 11 read. The director cast doubt at the evidence provided by the consultants saying he has not justified why the payment should be for Regicam Engineering instead of a combined write-up for payment of the two companies.
“Be informed that we are in a position to pay, therefore we will appreciate if you can re-submit your Interim Payment Certificate (IPC) in that manner in order to facilitate us to process the payment accordingly”.
However, Moakofi argues that the combined write-up was a once-off thing in February for IPC No.7 because of prevailing circumstances at the time and not prescribed in the contract agreement. He bemoaned that the delay has exceeded the stipulated times and therefore there is another dispute over the need for extension of the completion date. They have engaged Bayford Attorneys to demand the extension. “Client efforts to have the belated payment effected have been met with unsatisfactory answers. We, no doubt, believe that you appreciate that any further delay of payment is prejudicial to our client in that it has the effect of rendering it incapable of carrying out its obligations in terms of the parties’ agreement. Our client needs to pay employees’ salaries and other costs incidental to the carrying out of the works.”
Meanwhile, the contractor Tshepo Tile (Pty) Ltd is demanding appro,ximately P3.7 million from Regicam Enterprises (Pty) Ltd as works done and retention fees. The Seuwane project entails water reticulation and construction of a reservoir.