PPORTFOLIO ORTFOLIO CCOMMITTEE ON OMMITTEE ON PPUBLIC UBLIC SSERVICE & ERVICE & AADMINISTRATIONDMINISTRATION

PPORTFOLIO ORTFOLIO CCOMMITTEE ON OMMITTEE ON PPUBLIC UBLIC SSERVICE & ERVICE & AADMINISTRATIONDMINISTRATION

14 AUGUST 2015

INPUT BY: EMENDO INCTown & Regional Planners404 Anderson StreetMenlo ParkPretoria(012) 346 2526

1. EMENDO INC

Emendo Inc specialised in Town and Regional Planning and Project Management which provide a service to National Government, Provincial Government, Local Government, Parastatals and the Private Sector.

Service Include: Project Management for the design and construction of housing

developments and infrastructure projects; Design of Townships (BNG); Strategic Planning (IDP and Spatial Development Framework); Special Projects (policy, land audits, others).

Emendo Inc was established in 1996 and is a Level 2 BBBEE.

Offices in Tshwane, Alberton, Dihlabeng and Polokwane with a full-time staff compliment of 19 persons

2. OBJECTIVE

Purpose of this input:

Indicate the outstanding debtors owned to Emendo Inc by Government Structures;

Impact of outstanding debtors on operational activities; and

Actions taken.

3. CURRENT DEBTORS

The current debtors to Emendo Inc calculate to R22 538 935.39 which is summarized as follows:

GOVERNMENT STRUCTURE AMOUNT

A. PROVINCIAL GOVERNMENT Gauteng Department of Human

Settlement

B. LOCAL GOVERNMENT (Gauteng) City of Johannesburg MM Emfuleni LM

LOCAL GOVERNMENT (Free State) Maluti-a-Phofung LM Mangaung MM Nketoana LM Dihlabeng LM Ngwathe LM

R4 561 227,33

R12 667 430,13R67 615,68

R682 233,00R3 754 020,00

R114 076.25R350 333,00R342 000.00

TOTAL R22 538 935,39

NOTE:

Since the written submission (20 May 2015) to the Portfolio Committee, an amount of R6 540 817.62 was received;

All the work was completed to the satisfaction of the Client;

The Emendo Inc turn-over to sustain itself from an operational perspective amount to ± R8m per annum. From the above it is evident that the outstanding debtors calculate to ± 1,3 times the Emendo Inc annual turnover – no company can survive the aforementioned impact;

An substantial percentage (±60%) of the debtors need to be paid to sub-consultants.

4. IMPACT ON EMENDO INC OPERATIONAL ACTIVITIES

Retrenchment of ± 6 persons during 2014; Reduction of Company assets; Overdraft facilities had to be re-negotiated with Financial

Institutions; Threatening legal action from sub-consultants; Cannot provide work opportunities to young graduates. It was

always one of Emendo’s objectives to provide work to graduates.

5. ACTION TAKEN

Emendo is currently involved with an arbitration process against the COJ, which has cost Emendo in excess of R200 000-00 legal fees. We have tried to resolve the matter on a number of occasions without success.This process is not preferred by Emendo and would like to settle the matter outside arbitration. Arbitration date is set for 08/09/2015.

No legal action was taken by Emendo relations to other structures, owning to the following reasons:

Smaller Municipalities (Free State) have no funding available for payment. The allocated funding for the project was used for operational expenditure or to cover debts towards larger institutions (Water Authorities, Eskom, etc.);

High turn-over of staff. More than often Officials are replaced with new ones owing to resignations of restructuring. Newly appointed Officials do not have the background to the project and are reluctant to authorise payments. This scenario is prevalent in larger Municipalities and Provincial Departments.

Emendo Inc established good relations with the respective Government Bodies and did not want to compromise it’s good standing by taking legal action.

Emendo Inc did not want to jeopardise it’s relationship in the awarding of future tenders. In cases where service providers follow legal processes against a Government Body, such company is often “over-looked” in the awarding of new tenders.

6.CONCLUSION

From the above submission it is evident that Emendo Inc, which is classified as a small company is severely affected by the non-payment of Government Debtors.

We, herewith appeal to the Portfolio Committee to assist in resolving the matter, as Town Planners and Project Managers is much needed in the South African built environment.

It was always been the approach of Emendo Inc to empower young black professional, hence the composition of Emendo Inc where 90% of all staff is from historically disadvantage backgrounds. The composition of Emendo Inc is also reflected in the ownership of Emendo Inc.

THANK YOUTHANK YOUEMENDO INC CONTACT DETAILS

DIRECTORSMotsamai Mofokeng Andre Kotzemotsamai@emendo.co.zaandre@emendo.co.za083 228 52869 083 375 9448

Tshiamo Molematshiamo@emendo.co.za072 138 6863