Finances for water and sanitation projects must be examined

The basis of commerce is surely not that complex: you provide goods or services in exchange for cash. If this involves the simple daily process of buying a loaf of bread, this is an uncomplicated transaction.

When it involves a R1 billion multinational construction contract, it becomes far more complex. But the same basics hold sway – though this seemingly becomes a little more complicated when the department of water and sanitation became involved.

It emerged this week that an amount of R81 million was paid to a joint venture between KwaZulu-Natal construction mogul Philani Zondo and Italian construction giant CMC, which was awarded the R1bn contract to build an acid mine drainage plant in Springs, east of Johannesburg, before ground was broken – which is expressly forbidden by the Public Finance Management Act (PFMA).

But a departmental spokesperson insists the advance payment was regular. The contract under dispute was awarded by the Trans Caledon Tunnel Authority (TCTA), which falls under the department headed by Minister Nomvula Mokonyane, who is currently under fire for what is reported to be a departmental overdraft of about R3.5 billion.

It is also unable to account for about R654 million on its books, though the minister continues to insist that the finances are sound.

But a senior TCTA official went on record this week saying: “The media has neglected this organisation, but the rot that is here is enormous. The acid mine drainage projects alone are worth R12 billion. Companies have received projects which did not go out via public tender. People are carrying money out of this institution in bags.”

This is an anonymous allegation which has still to be tested, but clearly the amounts of money involved in what is an extremely sensitive part of our national infrastructure bear diligent examination.