Water and Sanitation Minister Nomvula Mokonyane has been ordered to pay outstanding bills amounting to more than R315 million to property magnate David Mabilu’s company, Vharanani Properties.
The order by the North Gauteng High Court in Pretoria followed a settlement between the minister and the infrastructure development firm, which has been battling since June last year to be paid for work relating to the implementation of the department’s bucket sanitation eradication programme in the Free State.
The court order follows in the wake of recent media reports that the department was R2.6 billion in the red and that hundreds of contractors who did critical work for the department have not been paid.
A report in City Press cited unpaid invoices of up to R1.7 billion, but the department denied that it was bankrupt or facing a financial crisis.
The auditor-general reported in October last year that the department’s irregular expenditure had risen by 300%, to R1.7 billion in one financial year of which about R1.3 billion was due to the department hiring external implementation agencies to execute its projects.
Mabilu said in court papers the department started to default on its payments for the project in June last year and has since failed to respond to payment demands.
He said the department’s failure to pay placed his company in an untenable position as it had to pay subcontractors, consultants and suppliers.
It also threatened to bring the bucket eradication programme to an end, which would greatly prejudice the poorest residents in the Free State and could threaten social stability in the province.
The department in October 2015 appointed Vharanani as contractor to construct fully functional water and sewer reticulation systems in a number of Free State municipalities.
The duration of the agreement, which was supposed to have been concluded by August last year, has been extended until the end of March 2017.
Mabilu said the department in May last year advised them to submit applications for payment to Blackhead Consulting, the project managers.
- Public Protector Busisiwe Mkhwebane is currently investigating the R26 billion Lesotho Highlands Water Project and the Special Investigations Unit is probing the Giyani Emergency Project that started off with a R500 million budget but ballooned to R5 billion.