SIU takes shady water board officials to the cleaners over corruption, maladministration

The Special Investigation Unit (SIU) is clawing back millions of Rands, while nailing officials and suppliers involved in long standing botched water supply tenders, including the controversial Giyani water project.

Some of the cases are in the high courts and taking longer to conclude, as lawyers block SIU applications to bring the civil litigations for speedy hearings at the Special Tribunal, said SIU head Advocate Andy Mothibi.

He told Members of Parliament on Wednesday that the projects investigated showed increased costs without much to show for it, wide spread maladministration, disregard of the public finance management act (PFMA), abuse of procurement processes, and poor project management.

“This is worrying. At Limpopo’s Vuwani pipeline project, which is an old investigation, the pipeline is still not functioning and the project is still incomplete. The department has now moved in to take over.

“For Lepelle project, the costs increased by 166%.…there is a serious problem here – how do you pay such huge amounts when projects are not completed,?” Mothibi asked members of the standing committee on public accounts (Scopa).

Action against Limpopo water entity boss Legodi

A high court case was lodged by the SIU to set aside a contract valued at R4.1 billion at water entity Lepelle Northern Water (LNW) in Limpopo. The case will return in the Limpopo High Court in Polokwane in October.

The LNW contract was part of the Giyani water project to supply at least 55 villages with much needed water. R3 billion was spent but the project remains incomplete eight years after it commenced.

A LTE Consulting Engineers was contracted by LNW while former minister of Water and Sanitation, Nomvula Mokonyane was at the helm. Mokonyane had called an imbizo in Giyani in 2014 to address water supply problems in the area.

Former president Jacob Zuma officially launched the project later that year.

Present at Mokonyane’s imbizo was LTE’s Thulani Majola, who told the SIU that he had met with LNW CEO Phineas Legodi after the imbizo to discuss possible plans to bring needed relief to the villagers who shared water holes with animals.

LNW first appointed LTE for non-emergency works to the value of R2.2 billion excluding tax in 2016. The SIU found that no procurement processes were followed when the project was extended from R90 million to R2.2 billion.

Legodi later resigned before a disciplinary hearing was held in February 2018. He faced charges of negligence and contravening the PFMA. Another manager, head of planning at LNW, was referred to prosecution for alleged collusion, fraud and forgery.

A court application was lodged at the Special Tribunal and Legodi’s pensions and properties were frozen,
pending the finalisation of the high court case.

“Even though billions of Rands have been spent in the project so far, the project is still incomplete,
as a result, people of Giyani are not getting any water from the project. The SIU team is finalising the final presidential report to be submitted to the Presidency,” said lead investigator Gina Pretorius.

ALSO READ: Mokonyane made me do it, says official in dodgy Giyani water project

DDG found guilty in corrupt SAP tender

Meanwhile, a deputy director-general in the water and sanitation department was in April found guilty in nine of ten charges in connection with the purchasing of SAP software worth R900m.

According to the SIU, a whistleblower alerted authorities about the irregular contract, alleging R35m in kickbacks that was received by officials.

“The contract value is approximately R950 million excl VAT, consisting of R450 million for the SAP licence fees plus maintenance over five years. No needs analysis or budget was done, the SETA was not consulted as was required. SETA later advised the department not to go ahead with contract. A total of R285 million was paid to SAP thus far,” Pretorius said.

The contract was set aside by the Special Tribunal in March, declaring it constitutionally invalid.

SAP has paid at least R263m in cash.

The DDG awaits a final verdict set for July, while a chief director, charged in the same case, will soon undergo a disciplinary hearing.

READ MORE: Giyani water project suffers further, as ‘Zuma and Mokonyane’s billions’ evaporate

‘Intern listed as company director at Amatola Water’

Apart from the Giyani water project, investigators further probed other entities, including KwaZulu-Natal water board Umngeni Water and Amatola Water in the Eastern Cape.

At Amatola, they found that an intern was a director of a company that was registered as a service provider for Amatola.

“This company was appointed to supply, deliver, and install water harvesting tanks. The intern turned out to be the sister of a buyer at Amatola. The buyer was also involved in the procurement of water harvesting tanks,” Pretorius said.

The SIU found contravention of PFMA and supply chain policy, overcharging and overpricing in the contracts, undeclared interests, changing of tender specifications midway, all of which drove up costs.

Said Pretorius: “One official was found to have a conflict of interest in that he was made to manage a borehole drilling project, allocate and monitor work, and approve payments of one of the companies which has his brother as an employee.

At Mhlathuze Water, in Richards Bay, KwaZulu-Natal, criminal charges were opened against members of the board. According to the SIU, supply chain processes were not followed and no measures were in place to mitigate financial losses.

“We experienced severe problems with access to documents, which were either lost, destroyed … negligently or deliberately. We found that the board failed to keep record of financial transactions of R9,9m payment in vouchers that could not be traced.

“Many of the original contracts totalling almost 19 million could not be found or did not exist, as a result, we found that  it contravened PFMA and Water Act in terms of financial and document safe-keeping.”

Where managers and employees resigned before disciplinary hearings, the SIU and the Department of Public Service and Administration coordinate to ensure that they face the music should they pop up at another state entity or department.

Pretorius added that the investigating body was aware of various allegations of mismanagement and irregular expenditure at Sedibeng Water Board.

“The SIU has requested and reviewed reports from the AGSA, OUTA, Parliament and the water and sanitation department in order to thoroughly assess the matter and the allegations around the billions of rands of irregular and unauthorised expenditure,” Pretorius said.”

Another soon to be investigated water project is the multi-million rand ‘War on Leaks’ program that was designed by the department in 2015 to train thousands of youth to fix leaking taps across the country.

Also on the SIU radar is Drop a Block,  where a brick-like green plastic block is placed in the the toilet cistern to save between two and four litres of potable water for every flush. It was first launched in the Western Cape in 2018.

NOW READ: Mchunu in for a roasting after a disastrous R3bn Giyani water project