A showdown is looming between the Matatiele municipality and the local community after alleged failure to disburse R19 million for an RDP housing project.
This emerged after the municipality failed to pay its implementing agents, S'dumo Trust, an amount of R2,7 million.
The company has since downed its tools in protest.
At the centre of the problem is the newly appointed municipal manager, Naledi Khohlokoane, and strategic manager, Thabisa Ntsalla, who have both been accused of lacking ability to do their jobs.
The town has more than 2000 people on its RDP waiting list and about 130 employees of S'dumo Trust who stand to lose their jobs.
Matatiele mayor Sello Ntai said he was not aware of any problems with the managers of the housing project and will investigate.
Khohlokoane was also not aware of any housing crisis. "The matter is between the municipality and the service provider," he said.
Vivian Haviside, director for S'dumo Trust, said they have suspended their contract. He said it was unfortunate that a development that was going on so well should now stop because of a lack of administrative abilities, alleged incompetence and negative interference by the Matatiele municipality.
He believed that the council had nothing to do with managers of this project playing hide and seek.
"This has become a case of a tail wagging the dog, not the other way around," said Haviside.
Resident Taelo Letseka threatened that they will take to the streets.
He felt that the R19 million made available by a KZN department to speed up the project during the transfer of Matatiele to Eastern Cape has been misused.