Khato Civils denies allegations by the SIU

Khato Civils has noted the media report that was reported by the City Press regarding alleged court papers that have been filed by the Special Investigative Unit (SIU) in the Polokwane High Court.

We wish to put on record that Khato Civils has to date not been served with any court papers nor contacted by the SIU regarding this matter. The allegations contained in the said court papers are not new and we are very happy to have our day in court where we will be given a fair opportunity to set the record straight to put this case to rest before an independent judiciary.

For the record, Khato Civils involvement in this project is a subcontractor who was duly appointed by the main turnkey developer, LTE, who was appointed by Lepelle Northern Water.

Khato Civils believes that all matters or queries relating to the validity or lack thereof, of the contract is a matter to be addressed by Department of Water and Sanitation, Lepelle Northern Water and LTE. Khato Civils was merely subcontracted by LTE to perform the works based on our capacity, track record and experience to perform works of this nature as a grade 9 CIBD maximum grading.

In terms of the work that has been done, which to-date represents 95% completion over a three year period, there has never been questions or doubts over the quality of works nor value for money. Our work has been world class, quality work which has been certified by several independent project engineers from Department of Water and Sanitation (DWS), Lepelle Northern Water, Ernest & Young (Later Fumile Consulting) and LTE. All our payments have been subjected to the rigorous evaluation and vetting process highlighted above before any payment was made to Khato Civils.

Throughout this project, Khato Civils, has experienced serious breach of contractual provisions through extreme late payments by Department of Water and Sanitation and Lepelle Northern Water which eventually led to our withdrawal from the project and retrenchment of over 500 hundred employees on 30th September 2018. This, unfortunate decision, also affected over 20 local subcontractors in Giyani area who were subcontracted and paid 40% of the R2.2billion contract. What remains to Khato Civils was value for materials used, labour, plant and diesel, 10% retention fees held by Lepelle Northern Water, 5% implementing Agency fees paid to Lepelle Northern Water, 15% project management and engineering fees paid to LTE, 14%(15%) for VAT paid to SARS.

It must be noted that SIU investigated this project in 2016 and never stopped the project, furthermore, the presidency has been involved in monitoring and evaluation of this project on a quarterly basis. Parliamentary committee on Water and Sanitation gave the quality of works and speed a thumbs up.

When we demand payment, after not been paid for over 9 months and we pull out because we cannot sustain the project under such circumstances, we are greeted with threats to cancel the contract based on legally flimsy basis.

If SIU or any Agency had any legal basis to stop the contract, why didn’t they cancel the contract within the four years it has been operational.

For Khato, if the Department pays all outstanding amounts for work done, we would go back to complete the remaining 25kms of the 325kms bulk water infrastructure pipeline that we were contracted to perform.

We also question the rationality and intentions by the SIU to prematurely leak this information to the media without formally serving us the court papers. As we respond to this article, we have not been served with any papers by the SIU, we therefore regard this whole exercise by the SIU as affectations.

Since we pulled out of site, part of a payment overdue by over 9 months was paid, however, a substantial amount remains unpaid to-date. No business can be sustained under such circumstances. Instead of finding an amicable solution to this matter, we have noted numerous attempts at bringing us into disrepute through inaccurate and frivolous public statements including numerous investigations based on flimsy grounds intended to intimidate and embarrass Khato Civils.

We will detail all these in our formal response to the court papers once they have been served on us. We cannot wait to have our day in court, we believe this is the greatest opportunity once and for all, to set the record straight and clear our name.

Issued by: Khato Civils PTY LTD

For More Information contact:
Mongezi Mnyani

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