KZN low-cost housing crisis: R428m worth of projects abandoned

George Mari, MPP

DA KZN Spokesperson on Human Settlements

The Democratic Alliance will call for a full-scale enquiry after a parliamentary reply from Human Settlements MEC, Ravi Pillay which reveals that R 428m worth of low cost housing projects in the province look set to be abandoned.

The disclosure comes after it was announced recently that the building contractor, Stedone Civils is facing liquidation.

The DA is highly disturbed by this revelation.

Stedone is the recipient of several government contracts in the past, particularly from the KwaZulu-Natal education and health departments.  One of its subsidiaries, Deebo Construction, is owned by Jacob Zuma’s cousin, Sibusiso “Deebo” Mzobe, recently linked to a low cost housing scandal in Mpumalanga.

According to the reply, the KZN Human Settlements department awarded contracts to the value of R 469 865 899.94 to Stedone during the last two financial years.  The projects are located at ten municipalities across the province including eThekwini, uMgungundlovu, Uthukela and Zululand.  Work has stalled in eight of the ten municipalities after the contractor was unable to pay sub-contractors.

The MEC admits that Stedone will not be able to complete the work in the vast majority of cases, while some projects are “currently under review”.

Meanwhile, the department has already paid R247 811 420.31 to the contractor.

The DA will submit the following questions to the MEC;

–        What measures were used by the department to ensure the financial standing of Stedone prior to awarding these contracts? [

–        Why were so many contracts awarded to a single contractor?

–        Were proper tender procedures followed – provide proof.

–        Has the work that the department paid for actually been completed?

–        What is the total loss incurred by the department?

In particular, we want to know whether Stedone has been paid for work not yet completed and, if so, why monies were handed over and how the department will retrieve this money.

These projects are for low cost housing – one of the most urgent needs in the province.  Yet these sites are now vacant and are an easy target for vandalism.  Any rectification costs will add to the bill, as will the appointment of a new contractor – all expenses which the department can ill-afford.

The DA expects the MEC to launch an immediate probe into this matter so that these questions can be answered.