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MBA North to tackle non-payment by state which is affecting the industry

by Darren

Mohau Mphomela, executive director of the Master Builders Association (MBA) North, has encouraged members to provide examples of governmental late- or non-payments so that MBA North can bring the matter to the personal attention of State President Jacob Zuma.

 

Mohau Mphomela, executive director of the Master Builders Association (MBA) North, has encouraged members to provide examples of governmental late- or non-payments so that MBA North can bring the matter to the personal attention of State President Jacob Zuma.

Mphomela says the association is aware that the profitability of members, particularly in view of the current slump in the building industry, is suffering substantially because of late payments. “But we need formal input regarding the guilty governmental parties from MBA North members so that we can complain to President Zuma on the ‘hotline’ he has opened to deal with state payment hassles,” Mphomela urged.

Wesley Soutter, commercial and legal director of MBA North, says it is most important to make the Presidency aware of state late- or non-payments to help expedite the proposed regulations drafted by the Construction Industry Development Board (CIDB). “The Department of Public Works has referred the proposed regulations back to the CIDB and unless MBA North starts an awareness campaign, the regulations could take a long time to finalise,” Soutter states.

He says delayed payment impacts on all contractors at all levels. “The new proposed regulations make provision for an adjudicator and for interest on late payments. However, there are major issues that should be regulated that are not covered in current contracts used in the construction industry.

“Contractors, for example, are often not paid because of disputes about how much is payable. While such disputes drag on, contractors have to borrow money and are charged interest on the borrowings. There is also the matter of retentions. Some contracts make provision for retentions to be held separately, but in practice contractors go into liquidation and then do not get their retention monies and do not earn interest on the retention funds,” Soutter adds.

Mphomela adds that this matter typifies the service MBA North can – and is prepared– to offer members. “It is, in fact, one of the main reasons for MBA North’s existence: To take up the cudgels with government in a united and collaborative fashion on key issues affecting the building industry,” he states.

MBA North members who can provide examples of late- or non-payment to strengthen the case the association would like to present to President Zuma, are asked to contact Soutter by email on Wesley@mbanorth.co.za.

Issued for MBA North, Midrand, Further information contact Wesley Soutter.
 Tel: 011 805 6611
Website: www.mbanorth.co.za

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