Inside the cash crisis of the department of water and sanitation
The department of water and sanitation has gone bankrupt, according to a report.
The former house chairperson who oversaw the an advisory board, Cedric Frolick, was expected to be replaced by Nomvula Mokonyane. Picture: Refilwe Modise
Hundreds of contractors who did critical work for the department have not been paid because it is bankrupt and experiencing a cash crisis worth R4.3 billion.
City Press reports that Nomvula Mokonyane’s ministry is in serious trouble and there is talk of placing it under administration because it is unable to complete crucial projects and pay contractors. High-level sources have revealed that internal controls, project management and contract management have collapsed.
Confidential emails, contracts and letters obtained by City Press show that there are invoices which are yet to be paid amounting to R1.7 billion, the water trading entity has an overdraft of R2.6 billion, the department is facing a R400 million lawsuit for unpaid work while the Giyani emergency project is yet to be completed due to a lack of funds.
A senior National Treasury official said the department has run out of money and this was flagged almost a year ago.
“Limpopo was placed under administration for R2 billion. This is far worse.”
Finance Minister Pravin Gordhan has met with Mokonyane to discuss the cash crunch facing her department. Matlakala Motloung, spokesperson for the department, confirmed this, adding that it was not a crisis meeting but two colleagues meeting.
Public protector Busisiwe Mkhwebane is currently investigating the R26 billion Lesotho Highlands Water Project with the Special Investigations Unit probing the Giyani Emergency Project that started off with a budget of R500 million and has now ballooned to over R5 billion. The project is also being investigated for tender irregularities.
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