Ethekwini Council Sued for R1,8m

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26 Apr 2011

The eThekwini Department of Housing has been accused of appointing “middlemen” for various housing projects amid claims that these individuals push up costs without adding any value to these projects.

Construction company boss, Philani Mavundla of PG Mavundla Projects is taking the department to court over unpaid bills amounting to R1,8-million.

The department applied to the Durban High Court for an urgent interdict to prevent Mavundla from removing roofs and doors from a block of flats in Shallcross, which he had renovated.

Mavundla claims that the threat was made “in the heat of the moment” because he was owed so much money by the council.

In his counter application – in which he claims R1,8-million – Mavundla claims that the council appointed “an implementing agent”, MFP Business Consulting. The council alleges that MFP Consulting overcharged it for the project, claiming R375 000 for each unit being refurbished at Shallcross.

Mavundla said in his papers lodged in the Durban High Court that the appointment of MFP Business Consulting deviated from the normal supply chain and had been appointed because the project was “special”.

He says that MFP Business Consulting – which has just one member, Petrus Mahlangu – was appointed to compile a business plant and provide project management for the R18,5-million refurbishment project.

However, PG Mavundla Project became the main contractor for this project in May 2009. A firm of architects had issued payment certificates to MFP Business Consulting who then added 15% commission to the payment certificate and submitted it to the council’s Department of Housing for payment.

Mavundla says that it is the council’s responsibility to manage project and pay for services rendered by professionals. He says that he has received payment on 14 of the interim certificates, but is still awaiting payments worth R1,8-million from the council.

He claims that the council has refused to pay him because he has instituted legal proceedings against it.

Apparently none of the refurbished properties had been transferred to the beneficiaries of the housing scheme. The department has until the end of this week to file its response to the High Court.

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About the Author
Paddy Hartdegen

Paddy Hartdegen

Freelance columnist at property24.com.

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