Botched roads deal keeps visitors from idyllic town

picturesque free state village of smithfield fears it could be cut off from the world for the peak summer season

a botched contract to upgrade parts of the n6 and a road to bethlehem has the picturesque free state village of smithfield fearing it could be cut off from the world for the peak summer season.

the contract was awarded by the south african national roads agency (sanral) to privately held building company rainbow construction, which has since applied for business rescue. work had now ceased on all of the road contracts awarded to rainbow by sanral, said logashri sewnarain, the agency’s manager for the eastern region.

conflict between two groups of labourers working on the contracts between reddersburg and smithfield shut the n6 on monday and tuesday when they refused to operate stop-and-go signs, she said.

"as sanral we apologise for any delays and inconvenience caused by the diversion in smithfield and for when the road was closed," ms sewnarain added.

in the victorian village of smithfield, the slowdown caused by the closure of the road had resulted in dispirited owners shutting down bed-and-breakfasts, resident john von ahlefeldt said yesterday.

the n6 cuts through the heart of smithfield and doubles as the village’s main road, on which most of its businesses trade.

people passing through the free state on their way to the eastern cape often take a break in their journey by staying overnight in smithfield or buying boerewors and biltong from the town butcher.

rainbow construction has diverted traffic to a road bypass ing the town completely. construction work on the road over the past months had "hit businesses hard" because of a loss of traffic, mr von ahlefeldt said.

rainbow construction confirmed yesterday that the company was financially distressed. "we have placed the company under formal business rescue in terms of the new companies act," rainbow md gerald loe said.

"i would prefer you to get comment from sanral. they are the client. i am not prepared to comment further."

on september 14, rainbow’s board voted to place the company in business rescue proceedings , according to an affidavit by mr loe filed with the companies and intellectual property commission.

"the directors of the company believe that the company is currently financially distressed in that it appears reasonably unlikely that the company will be able to pay all of its debts as they fall due and payable within the immediately ensuing six months," the affidavit read.

mr von ahlefeldt, who is retired and edits a monthly newspaper for the village called the smiffie, has made inquiries about the effect of the roadworks on the village .

"local businesses, already hard hit by the roadworks, were completely cut off from the outside world, leaving a strange silence over the town," he wrote in this week’s edition. "some businesses are having their worst trading period in more than a decade."

the road closure this week was the last straw for one of the six bed- and-breakfast establishments.

"the passing traffic is the lifeblood of the town, we rely on traffic," mr von ahlefeldt said. the average rate of 600 vehicles a day passing through rises tenfold in summer.

"in addition to the economic hardship caused by the roadwork, there is the physical mess left behind. several clumps of enormous old trees have been cut down, roads have been torn up, the entrance to town, once the pride of smithfield, is now a shambles. parking around the all- important garage and police station is chaotic and likely to be worse over the christmas season.

"the diversion is starving the town of business and the undertaking by rainbow to complete the work by december is now in doubt."

ms sewnarain said it was not clear when the work would be completed and a meeting with rainbow had been scheduled for next week. she believed the december deadline was likely to be missed.

in his affidavit, mr loe said rainbow construction generated revenue of r261m and costs of r320m on the road contracts at bethlehem, reddersburg and smithfield.

the net effect is a loss of r59,7m at the end of july, mr loe said.

its other contracts "are profitable and generate an income for the company (but) the substantial loss incurred on these three roads contracts caused such a drain on the company’s resources that it appears unlikely (it) will be able to pay its future debts as they fall due…. "

nicky smith