SANYATI, the black-empowered engineering and construction company, has applied for chapter six bankruptcy protection under the new Companies Act after unpaid bills from provincial governments have run up to about R80m.

The legislation aims to create a debtor-friendly environment in which creditors can co-operate with a rescue practitioner to commit to a rescue plan for the company

Several listed infrastructure companies have been hit recently by nonpayment by state departments and agencies. Basil Read, Raubex , Sanyati and Wilson Bayly Holmes-Ovcon earlier this month said the Free State roads department - which had three directors-general in six months - had accused contractors of corruption and bad workmanship, and refused to pay.

Construction giant Murray & Roberts was also embroiled in legal disputes over nonpayment for work on Gautrain and Eskom's Medupi power station.

In a statement on Sens, the JSE's news service, on Monday, Sanyati said among the money owed to it was R43m from the Free State provincial government for the rehabilitation of 15km of road between Harrismith and Oliviershoek.

"This project was awarded to Sanyati in April 2010, with the bulk of project costs incurred by October 2010," it said. "Despite the many assurances over many months by officials within the Free State government that this amount would be paid, the amount remains outstanding at today's date."

Sanyati said it was invited, along with other similarly affected contractors, to meet provincial government officials on May 31 to try to resolve the matter.

However, it said, the meeting "was inconclusive and did not provide any clear indication as to when and how this matter will be resolved".

The KwaZulu-Natal provincial government owes Sanyati more than R30m for three contracts, and Limpopo province owes it R6m.

Sanyati said it had appointed Trevor Murgatroyd as its business rescue practitioner.

On May 23, it had asked or its shares to be suspended on the JSE. Monday's statement said its February year-end results, which should have been published by May 31 to meet the JSE's three-month deadline would not be finalised before the end of June.

Last week, Martin van Veelen, president of the South African Institution of Civil Engineering, said that the construction and engineering industry had lacked work since the 2010 Soccer World Cup. "It's not going to change in the near future," he said.

The government had lost the ability to manage and execute projects, Mr van Veelen said. "That's exactly where it starts hurting. Government - all three levels of it - is not spending their money on capital projects, especially the local authorities."

With MARK ALLIX