Bid to recover billions from corrupt water projects in South Africa

AFRICAN MIRROR REPORTER

SOUTH Africa’s Special Investigating Unit (SIU) has uncovered fraud and corruption in several multi-billion rand contracts issued by the Department of Water and Sanitation (DWS) and has referred 36 cases for criminal prosecution.

The SIU has handed over the 36 cases to the National Prosecuting Authority and a further six cases to the Asset Forfeiture Unit to seize assets thought to be the proceeds of crime. 

SIU head Advocate Andy Mothibi disclosed to the Parliament’s Water and Sanitation Committee that the unit has discovered suspected criminal conduct when it probed the following contracts: 

  • Vuwani Steel Pipeline – R95-million.
  • Gauteng Department of Human Settlements – R108-million.
  • Lepelle Northern Water and LTE – R3,2-billion.
  • SAP – R1,1-billion.

Mothibi revealed that as a result of the investigations, the has recommended that disciplinary measures must be taken against 36 staff members at the DWS. Consequently, three officials have been dismissed, four resigned and a final warning was issued to one official. 

Mothibi said another 20 cases were referred to the South African Revenue Services for investigation into tax compliance.

On the R3.2-billion contract awarded by Lepelle Northern Water to LTE, Mothibi said an SIU probe revealed serious maladministration and malpractice. It also found that:

  • There was no water connection.
  • In the Giyani Project the price for boreholes including the treatment plant was between R1,2-million and R1,4-million per borehole. 
  • The company which was responsible for the Geotech services and managing the drilling of the boreholes indicated that the normal price for installing boreholes similar to the ones installed in Giyani is around R100 000.
  • The company supplying the water treatment plant, indicated that the price range for the treatment plant is between R195 000 to R295 000.
  • The water treatment plants worked for only a month. 

Mothibi said the SIU has instituted civil action to recover billions from a number of companies involved in the project.

He said an investigation into supply chain management has been completed and the SIU found that the contract was irregularly awarded, and as a result:

  • The civil litigation is an action to set aside the contract to the value of R2.2 billion and the SIU alleges that the contract was unlawfully and irregularly concluded. 
  • The parties to the litigation are: SIU v LNW Water Board, Khato Consulting Civils, Zambesi Engineering, Mopane District Municipality, LTE Consulting, Department of Water and Sanitation. The parties exchanged the final pleadings. The Court file has been paginated and indexed and counsel briefed to file Heads of Argument.
Advocate Andy Mothibi. Picture: Twitter

“The SIU will, after filing of the Heads of Argument by all parties, apply for a hearing date.

We advised the Department to proceed and claim monies due despite the threat to review the SIU report which to date has not transpired,” Mothibi said.

He also told the committee that the SIU has brought an urgent court application in the Special Tribunal and the pension of Phineas Legodi, who has resigned as CEO of Lepelle Northern Water Board, was frozen.

On the Vuwani project, Mothibi disclosed that the SIU has instituted civl action against the company that was awarded the tender to fix the pipeline but had failed to do so, despite being paid millions.

Mothibi said the case against Ascul Construction, its director Sikhosana and former employees of the DWS was expected to proceed in the Gauteng North High Court this month.

He said an SIU investigation revealed that evidence of fraud against Ascul Construction.