EC government’s R2bn bill ‘slitting the throat of our economy’
The Eastern Cape government owed 8‚400 service providers a whopping R2-billion.
This amount has tripled from the R466-million that the province owed service providers in the same period last year.
This was revealed by the Democratic Alliance‚ after it sent questions to the Provincial Legislature. The DA wanted to know from the provincial treasury how many companies were owed and money‚ and if the Eastern Cape government’s turnaround strategy of paying companies within 30 days was proving effective.
Finance‚ economic development‚ environmental affairs and tourism MEC Oscar Mabuyane said in his responses that all provincial departments were experiencing problems in making timeous payments to suppliers.
He said treasury was taking steps to resolve the problems.
“We are engaging provincial supply chain management unit on the issues of suppliers changing banking details without notifying departments resulting in delays on payment processes‚” said Mabuyane.
The DA’s Bobby Stevenson said the non-payment of service providers was “literally slitting the throat of our economy‚ as there is less money in circulation as well as strangling the future of small businesses by causing them to go under”.
Stevenson said this has a devastating impact on families who were struggling to put food on the table‚ pay for medical expenses and educational costs for their loved ones.
“Families are literally starving as a consequence of the slow payment to suppliers and the knock on effect of the unemployment rate‚” said Stevenson.
In March this year‚ thousands of Eastern Cape construction companies‚ under the Eastern Cape Black Contractors Association (ECBCA)‚ revealed that they were owed in excess of R400-million by the provincial government. The members had to engage government a number of times before their cries could be heard‚ as hundreds of employees were at risk of losing their jobs as businesses threatened to shut shop.
ECBCA member‚ Siyabulela Moko on Tuesday told this publication they were eventually paid their money.
“The government at the time had accruals and we were eventually paid what was due. I think those who are owed are businesses in other sectors‚” said Moko.
Mabuyane indicated in his responses that a staggering 8‚414 suppliers were still owed money for in excess of 90 days. R2‚053‚013 was owed as of the end of March 2018. The health department was the worst offender.
Service providers from hospital supplies‚ stationery‚ construction‚ consulting and IT were just some of those owed.
This is how much Eastern Cape departments owe service providers: - Health: R1.7-billion; - Education: R103-million; - Roads and Transport: R69-million; - Human Settlements: R36-million; - Transport: R26.5-million; - Rural Development and Agrarian Reform: R9-million; - Sports‚ Recreation‚ Arts and Culture: R7.7-million; - Economic Development and Environmental and Tourism: R2.9-million; - Social Development: R2.1-million; - Co-operative Governance and Traditional Affairs: R1.3-million; - Office of the Premier: R1.2-million; - Provincial Treasury: R360‚000; and - Safety and Liaison: R224‚000.
In some cases‚ changing of banking details of suppliers‚ late submission of invoices‚ incorrect billing by suppliers and dispute about rates were gives as reasons for non-payment.
Mabuyane said there would be interactions with provincial departments through quarterly provincial creditor management forums.
“Monthly follow-ups on the settlement of reported late payments by provincial departments and interacting with the departments‚” he said.