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Durban - Durban businessman Sbu Mpisane has been dealt a major blow, as funds for his Umlazi RDP construction project have run dry.
Zikhulise Cleaning, Maintenance and Transport, the company he owns with wife Shauwn, has secured over R450m in housing tenders from the eThekwini Municipality.
But now they have met a major snag with the KwaZulu-Natal Department of Human Settlements saying they have run out of funds to complete the projects. This also means no new projects will be initiated.
Platoons of his disgruntled subcontractors took to the streets of Umlazi on Monday morning in protest, blockading parts of Mangosuthu Highway with rocks and branches, in response to their contracts being abruptly ended.
The Mpisanes' windfall was met with ire after it emerged that the contracts were awarded under Section 36 [emergency regulations] that allowed the normal tender process to be bypassed.
25 luxury cars
In May last year she was on trial for allegedly inflating invoices by more than R5m to cut her tax bill, with the state later withdrawing the charges.
The couple live in an R80m home in Durban’s affluent La Lucia suburb and boast a fleet of 25 luxury cars.
When approached by News24, Sbu Mpisane first denied the allegations and then later changed his tune, explaining that there was a strike in Umlazi but those that were striking were not employees of Zikhulise.
“We are employed by the municipality and the municipality informed us [earlier this year] that the project needed to stop because Province had exhausted all funds to pay for the construction project.
The city told us that it had not been paid by the provincial government,” said Mpisane.
He said when the municipality informed him that funds had run dry, he in turn informed his subcontractors to stop all construction work at the Umlazi construction site.
“That is the reason why the subcontractors marched and told everyone that work had stopped. This is despite us informing them that the municipality said that we needed to stop the project because they can’t pay us and in turn we wouldn’t be able to pay them. The city said it would inform us when we can continue with the construction,” he explained.
Election promises
He said Zikhulise was working on other construction sites and could not divert funds from those projects to the construction in Umlazi.
“Some of those subcontractors are members of the community and now they are fighting with the councillors and the municipality because they are unable to go to work and there is no development in the area as was promised during the elections. The real problem is that there is no development in the area at the moment,” said Mpisane.
Mayoral spokesperson Sthembiso Mshengu confirmed that funds had dried up. “We are at the mercy of the provincial government,” said Mshengu.
He said the city had been underfunded for the 2013-2014 financial year.
“As a result there are no housing construction projects taking place at the moment. We will meet with Human Settlement MEC Ravi Pillay to try and iron out this matter,” he said, cautioning that this had become a serious matter that was leading to service delivery protests around the city.
“It’s a thorny issue and we may have to approach treasury for more funding. I want people to understand that there is no contractor that is guaranteed funding; they have to follow tender processes and take it from there.
“But our hands are tied at the moment and it’s not just Zikhulise that has been affected, there are several other contractors that have been affected.”
The Department’s Mbulelo Baloyi said the MEC would be meeting with the mayor on Thursday.
“We don’t have a contract with the Mpisane’s, they have a contract with the city. We work with business plans submitted to us by the city. We then budget according to the agreements with the city and ourselves,” said Baloyi.
Two in court for public violence
He explained that the demand for housing in the province was high.
“There is a tendency with the contractors to build more houses than initially planned to. This causes a problem because when they submit the invoices, the money requested to be paid to them is more than what was initially agreed upon. This is money we have not budgeted for.”
Baloyi however said the department was prioritising the issue.
Police spokesperson Major Thulani Zwane told News24 that two men appeared in court on Tuesday on charges of public violence.
“At about 10:00 on Monday, there was an illegal march on Umlazi Bakery Road in W Section. A group of people were marching and blockaded the road and threw stones, rocks and blocked the road with trees,” he said.
“We arrested two people for public violence and they appeared at Umlazi Magistrates Court yesterday [Tuesday].”
