By Eddie Botha

The recent landmark opening of the R520million Mdantsane City Mall has been marred by claims from subcontractors that they are still owed R12million for their work.

The feud over the outstanding payments has become so bad that the electrical subcontractor even withheld the main certificate of compliance in an effort to force KwaZulu- Natal-based Cyclone Construction, the main contractor, to pay up.

The certificate was released to Buffalo City Municipality only this week.

Some of the subcontractors, who are owed on average about R650 000 by Cyclone, said they face financial ruin if they are not paid.

At least five of the subcontractors, mostly locally-based , are now consulting with an East London legal firm.

Even the Billion Group, the developers of the mall, are putting pressure on Cyclone to meet its obligations .

Attorney Richard Jardine of Drake, Flemmer & Orsmond confirmed yesterday that he had been consulted.

“The matter has now been referred to the dispute resolution process referred to in the contract,” said Jardine.

But Cyclone’s Ken Stewart will not budge. “There exists a contractual relationship between the Billion Group and Cyclone Construction in terms of which a number of issues remain to be resolved. No material amounts of money are due to any subcontractor in terms of the agreements they have with Cyclone Construction, and certainly not of the order of magnitude you have intimated.

“Finally, if any party disagrees with the way in which the agreements have been interpreted, then there are contractual remedies within these agreements that can be applied,” Stewart said.

The mall, which Billion Group chief executive Sisa Ngebulana said represents a growing trend in retailers moving into townships , opened on time, with much fanfare, in April.

However, behind the scenes the subcontractors have been engaged in a war of words with Stewart.

At the centre of the dispute is an amount of R1.3m, which the Billion Group has deducted from Cyclone. The subcontractors say Cyclone passed that amount on to them.

Billion Group project manager James Steward said the amount deducted from Cyclone was not a penalty for late completion, but for a loss of rental income the group suffered when some tenants could not move into the mall on time.

He said the Billion Group was encouraging Cyclone to pay what was due to the subcontractors. Steward said the Billion Group has paid Cyclone all the monies it owed the construction company, except for the normal retention amount.

He said he understood that Cyclone had written to the subcontractors informing them that it was levying certain charges and penalties against them.

“We have indicated to them (Cyclone) that we have an opportunity to pose more severe penalties on them, which we don’t want to do.

“But we are saying to them, don’t do it (to the subcontractors) yourself.”

The Dispatch had reliably learnt that Performance Electrical’s Charlie Pascoe, who was responsible for the electrical work, had withheld the certificate in an effort to get the R3m that he is owed.

Bronwyn Linke of Bspoke, a small Beacon Bay company that supplied wrought iron parts for the doors, said Cyclone owes her R68 000.

“It is a drop in the ocean, but it is also the profit which we, as a small business would have made.

“Without it, I may as well not have done the job.”

Source: Daily Dispatch