Housing Project Grinds to a Halt Over Payment Dispute

Matatiele residents have been waiting since 2012 for their RDP houses to be built.

• A contractor is taking the Eastern Cape Department of Human Settlements and the Matatiele Local Municipality to court this month over unpaid fees.
• The contractor, S’dumo Housing Trust, was granted an R87-million tender to build 491 houses and started work in January 2024.
• The company completed 45 houses which were handed over to beneficiaries.
• But the remaining homes are unfinished.

Matatiele residents who have been waiting since 2012 for their RDP houses to be completed are up in arms.

Nearly 900 homes are meant to be built as part of the Eastern Cape Department of Human Settlements’ R121-million Mehloloaneng housing project. According to the department, beneficiaries prioritised for the project include child-headed families, people with disabilities, and military veterans from Mehloloaneng, Khoarai, Likhehane, Moeaneng and Mechadiareng.

But the project has been riddled with delays, and most houses are incomplete. Some only have a cement foundation.

The first contractor abandoned the site after building 205 houses at a cost of R45-million. Then in 2022, the department divided the remaining unfinished plots into two phases and appointed the Matatiele Local Municipality as the implementing agent.

The S’dumo Housing Trust was granted an R87-million tender to build 491 houses and started work in January 2024.

According to Ward 16 Councillor Lungisani Mkamba (ANC), a second contract to build the remaining 202 houses is yet to start.

Project steering committee secretary Katiso Doda told GroundUp that S’dumo had only completed 45 of 491 houses. These had been handed over to beneficiaries. An additional 227 houses only had cement foundations, 172 had frames only, and 75 houses had walls and a roof but nothing else.

Doda said the current problems with the project started in August when the company complained that the municipality was not paying them on time. “They informed us as the steering committee of the challenges. The company continued with work until December. This year they told us that they will not return on site until they are paid in full. At least they paid their workers,” said Doda.

S’dumo halted work at the site in December and filed an application at the High Court in Makhanda. The company’s director, Vivian Haviside, confirmed that the matter will be heard on 24 March but would not give details of the dispute or say how much money is being claimed.

Last month, beneficiaries attended a meeting with representatives of S’dumo and of Matatiele Local Municipality and a representative from the Eastern Cape Department of Human Settlements, Nomvula Qola. During the meeting, Qola told residents that the department had no dealings with the contractor.

She criticised the contractor for not continuing with work, stating that the department would eventually pay “no matter how long it took”.

But a representative of the contractor, who identified himself as Biggy Zenzele, said nowhere in the contract did it state that the company must continue work without being paid.

The municipality’s representative at the meeting, Dimpo Makoena, blamed the provincial department for the delayed payments.

Beneficiary Moeneng Mophoka’s RDP house is among those near completion. Meanwhile, she is living in a mud house. “This was going to be my first decent house. I’m slowly losing hope that it will ever be finished,” she told GroundUp.

Many houses are still unfinished.

Akhona Nodada said people are tired of waiting. “We are a very patient community that listens when government officials speak but we are getting tired now and once we are tired, they won’t like it,” he said.

Municipal spokesperson Ndabuko Masumpa confirmed that the full payment for the completed houses had not yet been processed. He said housing projects being implemented by the municipality are bound by service level agreements.

“According to the service level agreements signed by all service providers including S’dumo Housing Trust, payments are issued according to a defined ratio indicating that for every completed foundation, corresponding work, such as wall plates, roofs, and completed houses, must also be completed before payments are made.

“All service providers, including S’dumo Housing Trust, are required to meet these conditions. If a service provider fails to fulfil the specified deliverables, it has an effect on the processing of payment of invoices,” said Masumpa.

Spokesperson for the Eastern Cape Treasury Siphumelele Godwana confirmed that the treasury had received a complaint from the S’dumo about late payments.

He said the treasury had informed the department of Human Settlements and the matter would “be dealt with internally between the parties involved”.

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