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Hunt on for lost R21m in RDP deals

By Alex Matlala | Sep 14, 2009 | COMMENTS [ 0 ]

THE Limpopo department of local government and housing has put up a plan to recover more than R21million lost owing to poorly built RDP houses dubbed the "death traps".

The money was lost in payments made to developers who disappeared without completing their projects.

The companies that disappeared after being awarded contracts were Bakgalaka Building Construction, the Bakwevho Building Construction, Maphungubwe Civils, Seolo Developers, David Diva Construction Company and the Kgethegile Construction Company.

The companies defrauded the department of more than R21million between 2002 and 2004 in the building of 13000 houses.

Some of the companies disappeared without having laid a single brick, while others built a few houses and disappeared after the first or second payment was processed.

MEC for local government and housing Soviet Lekganyane said his department had instituted civil claims and obtained judgments against some developers.

Lekganyane said some of the developers' properties had been attached.

He said some of the defaulting developers had worked in cahoots with officials from the department.

"We have since brought them to book and hurled them before disciplinary hearings and later fired them.

"We have also managed to recover half of the money we lost through the shoddy dealings," he said.

Lekganyane said his department had begun the process of redoing the poorly built houses.

He said to date no less than 9000 houses had been built.

He said the houses would be completed by the end of next March by newly appointed developers.

"We have since embarked on a new approach to curb fraud, delays and shoddy construction by checking the track record of developers before a project is allocated to them.

"Say a developer is allocated 500 houses or more. The developer will be forced to provide an upfront guarantee of 5percent of the amount to be paid, which will not be transferable, negotiable nor irrevocable.

"The guarantee is held for the duration of the project and if the developer fails to deliver we have the right to reclaim the money from their bank accounts and appoint a new developer to complete a project," he said.

He said the new approach also required the department to pay the developer 95percent of the claim of his project and hold on to 5percent for about six months, during which the project managers thoroughly inspect the project under the supervision of the National Home Builders Registration Council.


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