Thousands of construction workers building water supply systems for rural areas have lost their jobs because the Amathole district municipality (ADM) can’t pay them.
Thousands more will now also go without safe drinking water they had been promised – after the ADM inexplicably ran out of the R200-million budgeted for the project.
It is a human disaster for the Eastern Cape which in June suffered the highest unemployment rate in the country of 42.5% (expanded), according to Statistics SA.
The R200-million shortfall closely matches the R215-million ADM paid to Siyenza Group for work the company had claimed to have completed on the collapsed R631-million toilet construction project.
Minutes of a meeting of six construction companies, part of a group contracted by ADM for its water and sanitation project around the district, revealed that three companies have already closed.
This has seen 1800 of their workers losing their jobs. A further 100 workers are facing retrenchments with another 3000 jobs among suppliers and sub-contractors in jeopardy.
These contractors and other sources with intimate knowledge of the Siyenza Group debacle, claimed the R200-million was part of a Municipal Infrastructure Grant (MIG) from national government to fund infrastructure projects.
Sources claimed the ADM had used the grant to repay a loan it had taken with the Development Bank of South Africa.
Following an investigation by the Saturday Dispatch which found Siyenza Group had been awarded the tender fraudulently, the DBSA demanded the money back.
But council spokesman Siyabulela Makunga yesterday denied the allegation that money budgeted for water supply projects ended up paying for the Siyenza debacle.
But furious contractors claim in minutes from an emergency meeting earlier this week, that “when the DBSA saw that the ADM toilet deal was dodgy, they recalled the funding”.
“Instead of DBSA dealing directly with the people involved in that scandal (Siyenza), ADM recalled about R200-million from the construction budget.”
Makunga could not explain why payments for one of the water projects, to supply 20 villages around Ngqamakwe with water, had dried up.
He would only say: “ADM is negotiating with all affected companies to reach an agreement on such matters as standing time.”
The contractors’ minutes, and interviews, revealed that 20 main contractors were suddenly told to stop work and were contacted by ADM this week.
The contractors were told to negotiate “standing time” penalties which could amount to R4-million a month for just one of the contractors.
This brings to an indefinite halt a social delivery programme to bring water to thousands of rural people across the district from Fort Beaufort to Ngqamakwe.
The Dispatch understands that among those who lost their jobs are engineers and other skilled staff, but most of the job losses affected local workers desperate for an income.
In a double-edged blow, ADM also failed to pay millions owed to numerous sub-contractors employed to dig pits and erect toilets for the Siyenza project.
Addressing a council meeting in Peddie yesterday ADM mayor Nomasikizi Khonza said the toilet project was 41% complete and that 27000 toilets had been built.
“We are now looking at ways of dealing with payments of sub contractors that were supposed to be paid by the Siyenza Group,” Khonza said.
One of the water supply contractors, who spoke on condition of anonymity, said they had not been paid since they stopped working in June.
This was after that had been issued with letters to “immediately vacate site”.
“In my company alone I had to retrench about 300 workers from all those villages in the Transkei. They are out of jobs and do not have water,” the contractor said.
Another contractor hired to erect toilets in the Peddie region said the municipality last communicated with them two months ago.
“We are in the dark. We are not sure if we will ever be paid. They have been promising to pay but we have not received anything yet.”
A CONTRACTOR'S TALE
THE following is a word-for-word heartfelt comment from one of the contractors plunged into financial ruin as a result of the Amathole district municipality’s payment failure:
IN THE previous financial year, we were told to wait for the new financial year. We waited patiently.
In July we were then told to wait for the 25th when National Treasury transfers MIG funds. We soldiered on. Ever since the 25th, the municipality has been promising to pay but until now, no payment has been made.
The municipality does not have money to pay service providers.
I am still trying to figure out why the municipality would lie to us. Do they understand the impact of their empty promises? I doubt.
What do I say to the general workers who have no other source of income, workers who have been waiting to be paid for work they completed five months ago. Very soon the bank will come knocking on my door to collect their car, their equipment and to auction their house.
Very soon my loyal employees of so many years will leave my organisation.
I also encourage them to look for other jobs as I cannot watch them suffer any more.
All my year’s investments in human capital will soon be gone.
The relationships with the financial institutions have been destroyed. My kids have been thrown out of school. I am now depending on antidepressants to be able to sleep. How I wish I was warned. How I wish ADM had prioritised the empowerment and development of emerging contractors instead of a certain Siyenza Group that has left their banks dry.
Our government encourages youth to consider entrepreneurship as a career whilst its institutions fail businesses.
When the money finally comes, it goes straight to cash loans.
One rich young man once said “when government gives you projects, they must please pay you on time because when they don’t pay, you come running to us, and we take away all the profits”. He continued to ask, “Who gets empowered at the end? Us” Some government officials ask, “why aren’t you using money from your other projects?”
I wonder how would they feel if their monthly income would be cut by up to 60% without any warning. My questions are, how long will we suffer due to the municipality’s failure to plan? And how long must we be the victims of a corrupt system.
JOB CARNAGE AS COUNCIL DUMPS DEALS
Thousands more will now also go without safe drinking water they had been promised – after the ADM inexplicably ran out of the R200-million budgeted for the project.
It is a human disaster for the Eastern Cape which in June suffered the highest unemployment rate in the country of 42.5% (expanded), according to Statistics SA.
The R200-million shortfall closely matches the R215-million ADM paid to Siyenza Group for work the company had claimed to have completed on the collapsed R631-million toilet construction project.
Minutes of a meeting of six construction companies, part of a group contracted by ADM for its water and sanitation project around the district, revealed that three companies have already closed.
This has seen 1800 of their workers losing their jobs. A further 100 workers are facing retrenchments with another 3000 jobs among suppliers and sub-contractors in jeopardy.
These contractors and other sources with intimate knowledge of the Siyenza Group debacle, claimed the R200-million was part of a Municipal Infrastructure Grant (MIG) from national government to fund infrastructure projects.
Sources claimed the ADM had used the grant to repay a loan it had taken with the Development Bank of South Africa.
Following an investigation by the Saturday Dispatch which found Siyenza Group had been awarded the tender fraudulently, the DBSA demanded the money back.
But council spokesman Siyabulela Makunga yesterday denied the allegation that money budgeted for water supply projects ended up paying for the Siyenza debacle.
But furious contractors claim in minutes from an emergency meeting earlier this week, that “when the DBSA saw that the ADM toilet deal was dodgy, they recalled the funding”.
“Instead of DBSA dealing directly with the people involved in that scandal (Siyenza), ADM recalled about R200-million from the construction budget.”
Makunga could not explain why payments for one of the water projects, to supply 20 villages around Ngqamakwe with water, had dried up.
He would only say: “ADM is negotiating with all affected companies to reach an agreement on such matters as standing time.”
The contractors’ minutes, and interviews, revealed that 20 main contractors were suddenly told to stop work and were contacted by ADM this week.
The contractors were told to negotiate “standing time” penalties which could amount to R4-million a month for just one of the contractors.
This brings to an indefinite halt a social delivery programme to bring water to thousands of rural people across the district from Fort Beaufort to Ngqamakwe.
The Dispatch understands that among those who lost their jobs are engineers and other skilled staff, but most of the job losses affected local workers desperate for an income.
In a double-edged blow, ADM also failed to pay millions owed to numerous sub-contractors employed to dig pits and erect toilets for the Siyenza project.
Addressing a council meeting in Peddie yesterday ADM mayor Nomasikizi Khonza said the toilet project was 41% complete and that 27000 toilets had been built.
“We are now looking at ways of dealing with payments of sub contractors that were supposed to be paid by the Siyenza Group,” Khonza said.
One of the water supply contractors, who spoke on condition of anonymity, said they had not been paid since they stopped working in June.
This was after that had been issued with letters to “immediately vacate site”.
“In my company alone I had to retrench about 300 workers from all those villages in the Transkei. They are out of jobs and do not have water,” the contractor said.
Another contractor hired to erect toilets in the Peddie region said the municipality last communicated with them two months ago.
“We are in the dark. We are not sure if we will ever be paid. They have been promising to pay but we have not received anything yet.”
A CONTRACTOR'S TALE
THE following is a word-for-word heartfelt comment from one of the contractors plunged into financial ruin as a result of the Amathole district municipality’s payment failure:
IN THE previous financial year, we were told to wait for the new financial year. We waited patiently.
In July we were then told to wait for the 25th when National Treasury transfers MIG funds. We soldiered on. Ever since the 25th, the municipality has been promising to pay but until now, no payment has been made.
The municipality does not have money to pay service providers.
I am still trying to figure out why the municipality would lie to us. Do they understand the impact of their empty promises? I doubt.
What do I say to the general workers who have no other source of income, workers who have been waiting to be paid for work they completed five months ago. Very soon the bank will come knocking on my door to collect their car, their equipment and to auction their house.
Very soon my loyal employees of so many years will leave my organisation.
I also encourage them to look for other jobs as I cannot watch them suffer any more.
All my year’s investments in human capital will soon be gone.
The relationships with the financial institutions have been destroyed. My kids have been thrown out of school. I am now depending on antidepressants to be able to sleep. How I wish I was warned. How I wish ADM had prioritised the empowerment and development of emerging contractors instead of a certain Siyenza Group that has left their banks dry.
Our government encourages youth to consider entrepreneurship as a career whilst its institutions fail businesses.
When the money finally comes, it goes straight to cash loans.
One rich young man once said “when government gives you projects, they must please pay you on time because when they don’t pay, you come running to us, and we take away all the profits”. He continued to ask, “Who gets empowered at the end? Us” Some government officials ask, “why aren’t you using money from your other projects?”
I wonder how would they feel if their monthly income would be cut by up to 60% without any warning. My questions are, how long will we suffer due to the municipality’s failure to plan? And how long must we be the victims of a corrupt system.
Would you like to comment on this article?
Register (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Trending Now
Latest Videos