The plot thickens around fire station contractor

J and J Construction and Plant Hire owner Jaco Els brought in an excavator to remove all the foundation work he did but was not paid for.

EVEN more problems have emerged with the construction of the new Albertina Sisulu Fire Station, following workers not being paid their salaries.

This time Shotha Engineering, the company hired to do the construction work, has been accused of failing to pay a subcontracted firm over R700 000 for their work.

J and J Construction and Plant Hire owner, Jaco Els, approached EXPRESS to complain that Lara Mulaudzi, owner of Shotha Engineering, owed R777 456 for civil work completed in January this year.

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Fire station construction grinds to a halt as workers are not paid

The company was subcontracted by Shotha Engineering to do the civil work, which included ground work, platforms and supplying the sand on the construction site.

“All he did was send me emails and letters back and forth promising to pay the money since January,” Els explained.

In one of the letters from Shotha Engineering to J and J Construction, Mulaudzi promised to pay the money by March 24. In the letter, he cites cash flow challenges and a slow inflow as the problem.

In a second email sent to J and J Construction on April 4, Shotha Engineering makes another promise to pay the company R500 000.

SHOTHA Engineering employees have gone back to work after being paid their salaries.

The email also says Shota Engineering would press charges of trespassing and damage to property against J and J Construction should they remove any material from the site without a court order entitling them to do so.

On Thursday last week, Els had begun processes to remove his foundation work he had done on site.

He decided to not go ahead when Mulaudzi deposited R150 000 into his account, only a fraction of what he is owed.

“I will not remove anything for now. But I will give him another two weeks to pay the rest of the money and if he doesn’t, I will be back to remove the work done here by my company,” Els warned.

Even though Mulaudzi claimed the company had financial problems, Ekurhuleni metro confirmed the DEMS (disaster and emergency management services) Department paid Shota Engineering on April 26.

The DEMS Department budgeted for a total amount of R8.4 million in the 2016/17 financial year.

Mulaudzi had submitted an invoice on March 31, but it had discrepancies which had to be corrected by him.

“It was returned by the finance department during the week of April 10 for correction by the contractor (i.e. Shotha Engineering). A corrected invoice was resubmitted to the department on the April 21,” Themba Gadebe, spokesperson for the Ekurhuleni metro, said.

“It should be noted that council policy dictates that payment of invoices must take place within 30 days after submission of the invoice for payment. DEMS Department would like to confirm that the budgeted amount for the project is below R50m. The payment of the contractor’s employees is an issue between the relevant contractor and its employees.”

Gadebe continued that Mulaudzi misled the department with regards to the projected expenditure.

“It is common practice that a construction contractor, before it embarks on construction of the project, submits a projected cash flow which is in line with the available funds.”

Shotha Engineering submitted a projected cash flow through the relevant consultant, which was then submitted to the DEMS department on the amount of funds that will be required until the end of the current financial year.

“The available funds in the budget were enough to carry through the project until the end of current financial year. It implies that the contractor itself misled the department about their projected expenditure. If the correct projected flow was sent to the department as required, provision could have been made well in advance before the funds ran out for the project. The contractor outperformed its own projected cash flow for not adhering to the programme as given to the department,” Gadebe confirmed.

Meanwhile, the contract workers on site have gone back to work after being paid their salaries.

They had previously stopped working because they hadn’t been paid their money for March.

They still haven’t been given contracts to sign.

The bid for the construction of Albertina Sisulu Corridor Fire Station was awarded to Shota Engineering in September 2016 and site hand-over took place in October 2016.

EXPRESS contacted Mulaudzi on Monday morning. He said he was busy. He said he would call EXPRESS back. He did not answer further calls. An email requesting comment on the matter was sent to him on Monday.

  AUTHOR
Nolwazi Dhlamini
Senior Journalist

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