Windhoek — In one classical example of the challenges faced by small building contractors, the building contractor for Adforce building along Jan Jonker Street in Windhoek is facing the possibility of a legal challenge after failing to honour contractual obligations.

The contractor, who declined to be identified, was contracted to construct the building and hand it over to the owners in five months. However, 11 months later, the building remains incomplete and the contractor is being hounded by his employees, who have not been paid for the past three months.

The client could also demand penalty fees from the contractor but has decided against it out of sheer pity.

"It is a classical problem [with] most of our builders who get themselves into jobs they cannot handle," said quantity surveyor Iyaloo Nangolo, of Jordaan Oosthuysen Nangolo Surveyors, who contracted the contractor. The matter is now set for arbitration between the contractor and the clients.

Besides the building contractor, there are also two other sub-contractors, the Namibia Air Condition and Refrigerators, and Khomas Electrical, who have not been paid for their work on the building, as a result. Employees of the main building contractors walked into New Era's offices this week crying for their money. Employees say they face eviction from their houses, as they have been unable to pay rent, let alone feed their families.

Nangolo said they selected the contractor on the basis of his previous work but it soon became clear that the contractor had financial problems.

"It seems he failed to raise the bridging finance as he started struggling after two or three months into the job, relying entirely on us to value the work and get the money to pay his workers," said Nangolo.

In addition, the increase in the price of building materials, such as steel and cement, affected the work, as the contractor had not made provision for price escalation.

The contractor was given the site in December last year and was supposed to hand over the building to the clients in May this year. Nangolo said they have taken pity on the contractor and have paid him on time for every work done.

"But there is so much one can do to help a struggling person," said Nangolo, adding that they are now compiling the last evaluation for payment and would hand the site to a new building contractor to complete the job.

Nangolo said they are also worried about the electrical and air-condition sub-contractors who are owed about N$120000 plus VAT for about six months.

"Contractually, we are liable to these sub-contractors," said Nangolo.

Workers and sub-contractors contracted by the main contractors said they have lost their credit facilities with suppliers as well as bank collaterals and doubt whether they would be able to fix their reputations.

"Our good name and reputation is gone. Workers take things from our houses in lieu of their salaries," said the sub-contractors to the main contractor.