A growing payment dispute between the developer of the new Matumi Retail Centre and the project’s former main contractor has left multiple local subcontractors alleging they are owed millions of rands, with some now fearing they will be unable to pay staff salaries or bonuses this December.

ALSO READ: Mbombela municipality’s R356m Eskom debt write-off sparks controversy

While the development opened for trade on August 28, the financial fallout behind the scenes is escalating. More than 20 subcontractors are now co-ordinating in a WhatsApp group, claiming they have not been paid in full for work completed on the project.

Both the developer, Sampada Lodges (Pty) Ltd, and the former main contractor, Ruwacon (Pty) Ltd, have issued strongly worded statements, each insisting the other is responsible for the cascading payment failures.
Several Mbombela-based subcontractors told Lowvelder they have been waiting months for payment, despite having completed their scope of work before the centre opened.

Monty Whitting, a local subcontractor, says he is owed more than R4m. “Payments either didn’t happen at all, and those that did come through were late. We’re now at a point where small businesses cannot survive this,” Whitting said.

According to him, the matter extends far beyond one or two firms.
He is part of a WhatsApp group with more than 20 subcontractors, all claiming outstanding invoices. Several told Lowvelder they are unable to pay staff this month, let alone December bonuses.

One subcontractor, responsible for waterproofing the walls and walkways, says he is owed R1.4m.
Whitting disputed claims that subcontractors performed defective work.

“We only heard afterwards that they’re suddenly saying the work was defective. We were never told that on site, not once. If something needed fixing, we would have fixed it immediately.”

Another subcontractor described the situation as ‘devastating’, adding: “We’ve got workers who rely on us. December is supposed to be when we reward staff, not tell them there’s no money.”

Ruwacon confirmed that subcontractors have not been paid in full, but insists the ‘root cause’ is the developer’s alleged failure to pay Ruwacon for significant portions of completed work.

ALSO READ: IN PHOTOS: Lucky draw winners at the Meat World Matumi’s grand opening

In a formal statement, Ruwacon’s northern region manager, Alex Keevy, said subcontractor difficulties stem from ‘late and incomplete payments to Ruwacon by the employer,’ as well as ‘significant under-certification of work by the principal agent’ appointed by Sampada.

According to Ruwacon large portions of its own work, labour and materials for August, September and October were not certified and therefore not paid. The October payment certificate, due on November 25, also remains unpaid. Some subcontractors who protested had ‘substantial portions of their work not certified,’ meaning no payment could legally be made under the JBCC contract.

ALSO READ: Car sit-in in i’langa Mall raises money for CANSA

Ruwacon says it issued several formal contractual notices, including ‘failure by the employer to provide a payment guarantee, repeated late or incomplete certification of progress payments, and disputes over penalty deductions and valuation of work.’

All of these matters, Ruwacon states, are now being handled through JBCC dispute-resolution, including adjudication and arbitration. Ruwacon rejected allegations that they withheld subcontractor funds:

“We reject the suggestion that subcontractor non-payment resulted from any withholding of funds by Ruwacon. The company acted transparently throughout and repeatedly sought to engage constructively with the employer.”

In its response, Sampada, firmly denies allegations that it failed to pay Ruwacon. Sampada insists that Ruwacon was paid in full for all certified work.

Under the JBCC contract, the developer may only pay the main contractor, not individual subcontractors.
Subcontractor payment is entirely Ruwacon’s responsibility, and Sampada has no legal ability to intervene. The contract with Ruwacon has since been terminated.

Sampada also refused to release invoices, proof of payments, or payment certificates, citing confidentiality obligations under the JBCC and the construction contract, POPIA restrictions, proprietary financial information belonging to Ruwacon, and the fact that the matter is ‘currently sub judice.’ Temba Xakaza, the property development manager for Sampada, added that ‘the core issue remains that Ruwacon did not pay its subcontractors, and not that Sampada failed to pay the main contractor.’

ALSO READ: Man arrested near Waterval Boven faces charges relating to immigration, fraud and money laundering

With both companies accusing the other of causing payment delays, subcontractors appear trapped in the contractual deadlock. What remains uncontested is that multiple subcontractors have not been paid.
In the meantime, small Lowveld businesses, many who built substantial portions of the centre, face mounting financial pressure with no clear timeline for when, or if, they will receive payment.

By the time of going to press, Whitting confirmed to Lowvelder that he was promised some payment by the end of this week.