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Cash-strapped Limpopo municipality faces court action for failing to pay R10.9m

2019-10-07 17:23

The cash-strapped Fetakgomo Greater Tubatse Local Municipality in Limpopo could be taken to court should it fail to pay an electricity contractor’s R10.9 million invoice from 2017.

Mphaphuli Consulting’s lawyers have served the municipality with yet another letter of demand in their prolonged dispute about a R326 million electrification project, Operation Mabone.

The company was appointed in 2013 to implement the pilot project to provide electricity to 13 500 households in 24 villages, but it has suffered late and no payments for completed work without any clear and concrete reasons.

Last year, the municipality had to be forced through the attachment of its investment accounts to pay R41 million due to Mphaphuli Consulting, after defying a Polokwane High Court order to pay the company for work done.

The municipality eventually paid the money but appealed the decision in the Bloemfontein Supreme Court of Appeal and failed.

Former municipal manager, Johannes Mohlala, then notified the company that its contract was being terminated due to lack of funds and poor performance, but refused to provide the company with a council resolution.

According to the letter of demand from Snail ka Mtuze Attorneys, Mphaphuli Consulting chief executive officer Lufuno Mphaphuli initially sent the invoice of R9.7 million plus interest of R1.2 million to the municipality on November 20 2017.

The invoice was never paid.

Read: Limpopo villages kept in the dark

“It is our instruction that should you fail, neglect and/or refuse to make payment of the amount claimed by our client plus interest, we proceed with the necessary legal action against the municipality. Please note that we are in any event proceeding to have summons issued in the Polokwane High Court on behalf of our client considering that no payment is forthcoming to date,” reads the letter.

Greater Tubatse Fetakgomo spokesperson, Thabiso Mokwena, could not be drawn into commenting in detail about the claim.

“The matter between Mphaphuli Consulting, the Special Investigating Unit (SIU) and Fetakgomo Tubatse Municipality is still pending in court and therefore we are unable to entertain any issue before the finality of the case,” Mokwena said.

SIU joins in

The SIU has now joined in the fray and applied in the Polokwane High Court to have Mphaphuli Consulting’s contract terminated.

The SIU has been investigating the municipality for maladministration since 2014, according to the Presidential Proclamation R52 of 2014, that did not include the company when it was issued.

Mphaphuli has accused the SIU of being a “hired gun” used to retaliate on the municipality’s behalf following its failure to overturn the R41 million attachment and cancel the company’s contract – a claim the SIU has denied.

Read: Firm accuses SIU of being ‘hired gun’ in R326m contract dispute

Despite the SIU having gone to court to apply for an order to cancel the contract, the municipality appointed Eskom to finish the work for R167 million to electrify 8 430 households in eight villages.

The case is still pending.

Limpopo premier Stanley Mathabatha placed the cash-strapped municipality under administration last November.

Its leadership had been taking reckless decisions, one of which was investing and then losing R230 million in the controversial VBS Mutual Bank.


Sizwe sama Yende
Journalist
City Press
p:+27 11 713 9001
w:www.citypress.co.za  e: Sizwe.Yende@citypress.co.za
      
 
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October 13 2019