R200m hospital project halted over payment dispute

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R200m hospital project halted over payment dispute

Neo Goba | 2017-02-02 07:44:44.0

Contractor halts Thelle Mogoerane Hospital Accommodation project due to an outstanding balance of R3.1 million owed. File photo

Image by: Gauteng Legislature

A R232-million hospital accommodation project has been shut down indefinitely by an angry contractor over payment delays.

Liviero construction group has told the Gauteng Department of Infrastructure Development (GDID) that it will not resume work on the Thelle Mogoerane Hospital Accommodation project until the company receives the full amount it is owed‚ despite the company having received the bulk of the project payment.

The company is the main contractor in the R231 912 000 project which was meant to take 18 months. The project was scheduled to be completed in September 2016.

The contract is for the construction of new accommodation for nurses and doctors‚ a training centre‚ a multi-purpose hall‚ gym facility‚ crèche and a covered link bridge to the new Thelle Mogoerane Hospital‚ previously known as Natalspruit Hospital.

“From our side the issue is payment. We have been experiencing problems from the beginning of the project and we are sitting at 340 days of delays from commencement of the project.

We normally submit our [invoices] on time to the Department of Infrastructure Development but we are getting payment late and we are getting stories that the money is being transferred late from the Health department to the Department of Infrastructure Development to release the payment as per the payment certificate‚” said Stopper Rantsiapana‚ Liviero’s senior quantity surveyor and head of Thelle Mogoerane Hospital Accommodation project.

He said after their company held a meeting regarding the outstanding payments‚ they decided to send a notification of suspending the operations until the settlement of the balance.

The Gauteng government has paid Liviero R8.1 million for the November invoice and are now left with an outstanding balance of R3.1 million for the December invoice.

In total‚ the department has paid the contractor almost R229-million (R228 812 000).

Yesterday‚ Cogta MEC for Infrastructure Development Jacob Mamabolo conducted a construction site inspection in Vosloorus where hospital accommodation is being built.

This was after a portfolio committee meeting was held on Tuesday where members of the legislature aired their concern over project delays.

“From our side‚ we have already handed over the two blocks and the four blocks will be ready in a weeks’ time as soon as we receive money and the rest‚” Rantsiapana said on the site visit.

In November‚ the GDID received an invoice for R8.1 million and on 15 December‚ received the second one totalling R3.1 million which is the remaining balance for the completion of the project.

However‚ Mamabolo was not convinced by the company’s rationale‚ saying the contractor was not acting in good faith.

“If I can tell the truth‚ you have no reason to walk off sight. I am championing 30 days payment and I understand that you must be paid in 30 days and I’m sympathetic to that. But I think we will work with your company on this matter… we cannot have a company that adopts such an attitude. If the company can’t build a working relationship with us and understand our factors‚ is not the correct way to do things.

“The principle of construction is that projects will have issues and all we need is leadership to help us troubleshoot and manage the problems‚ not to take this type of attitude because construction sites will normally have problems‚” added Mamabolo.



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