Johannesburg’s CBD at night. Picture: BLOOMBERG
Johannesburg’s CBD at night. Picture: BLOOMBERG

The City of Johannesburg has announced measures to crack down on nonperforming construction companies.

New city contracts will include a clause that allows for early termination if standards are not met‚ member of the mayoral committee for development planning Funzela Ngobeni said.

Ngobeni said the decision was made after the Johannesburg Development Agency (JDA) was forced to terminate contracts for four construction projects‚ namely the Nancefield Transit-Oriented Development‚ Langlaagte Pharmacy Depot‚ Thoko Ngoma Clinic and the Rabie Ridge Sports Centre.

"I am delighted to announce that a new special clause allowing for early termination of contracts has been incorporated into the City of Joburg’s new set of standard construction tender contracts‚" Ngobeni said in a statement on Wednesday.

"During investigations‚ it was found that issues related to cash-flow‚ which affected production and the quality of work‚ were evident in all four projects. It became clear that the contractors overstretched their resources‚ and in many instances‚ used money allocated to JDA to cross-fund other projects.

"Should contractors fail to reach milestones as per the timelines set‚ the new clause will be implemented to terminate any contractual agreements," he said.

Ngobeni said the projects were due to be delivered between September and November last year‚ but the contractors failed to do so. Costs had also escalated by at least R49m due to poor quality of work.

New contractors took over in March and were scheduled to complete the projects by August.

"It needs to be stated that there is a need to review industry-based contracts. This will mean that contractual performance and terms of termination based on specific project timelines will become a reality‚" Ngobeni said.

"The JDA‚ through its legal team‚ is in the process of recovering all the associated costs from the individual contractors. My department and the JDA are working tirelessly to recover lost time in the implementation of projects. This is important‚ so that our residents benefit from their government.

"We are committed to ensuring that every cent of public money is accounted for and well spent," he said.

TMG Digital

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