The Limpopo water project expenditure has currently reached US $1Bn from the initial US $37m. The sudden increase in value is attributed to the handing down of contracts to various companies over the years. Most of the companies abandon the project due to payment arrears.
In August last year, Vharanani Properties abandoned the emergency water project after the department failed to pay the company US $5.9m. Lepelle Northern Water contacted the company to draw water from Nandoni Dam to the arid town of Giyani.
Also read:Â Climate concerns impedes construction of Limpopo coal-fired power station
Payment arrears
Three weeks ago, South Zambezi contracted to the project downed their tools. This is also following Lepelle’s failure to pay the company a service fee of approximately US $3m. Khato Civils,the company responsible for construction in Giyani, followed suit two weeks ago.
According to the owner of Vharanani Properties, Lepelle Northern Water is still yet to remit their debt. According to him the department remitted US $3.7m and promised to settle the remainder before the end of July. However, this did not happen and eventualy the company pulled out.
Khato Civils’ Chief Executive Mongezi Mnyani said that the company has taken a decision to down tools until the department honours its payment. This is due to the fact that inadequate supply of the engineering and project management personnel on site has since made it difficult to progress with the work.
South Zambezi director of projects Makoko Makgonye said the company abandoned the project, because the department failed to pay them US $ 2.9m. This week, Lepelle Northern Water confirmed there was still a payment backlog to Vharanani Properties, saying the matter was receiving attention.
