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The Gauteng Local Government and Housing department owes R271 million to 238 companies that have not been paid within the specified 30 day period.
This was revealed by Gauteng Local Government and Housing MEC, Humphrey Mmemezi, in a written reply to my questions in the Gauteng Legislature.
Of the 238 companies, 56 companies are owed R6.5 million for more than 90 days and 23 companies are owed R3.7 million for more than six months.
Mmemezi says that payments were stalled because the financial year-end is in April and the past year’s budget needed to be closed when the new year’s budget was allocated.
This explanation is unacceptable. Recent payments might have been affected by the financial year-end but how does the MEC explain the payments overdue by over six months?
One company, Busi Ntuli communications (PTY) Ltd, has taken legal action against the Department to obtain outstanding payments.
The Department needs to pay all outstanding invoices immediately. Its inability to manage its finances successfully puts major financial pressure on companies, which sometimes halt housing construction because they have not been paid.
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