Limpopo water a trickle, but the costs gush

The cost of a project to supply water to a large area of Limpopo has ballooned from R2.2bn to R3.2bn.

The project, launched six years ago, was meant to provide water for 55 villages in the Giyani area, but residents still do not have a reliable supply.

Details of the vast hike in the cost of the project, initiated during the tenure of former water & sanitation minister Nomvula Mokonyane, are contained in a presentation the Special Investigating Unit (SIU) made to the standing committee on public accounts (Scopa) in parliament on Friday.

SIU head Andy Mothibi told MPs that investigators discovered the cost increase in documents seized in November from the offices of the Limpopo water utility, Lepelle Northern Water.

"From the documents seized, it is clear that Lepelle Northern Water continued with the services of the contractor after they received summons. The contract value went from R2.2bn to R3.2bn," the presentation stated, adding that the SIU obtained the documents to conduct a "value-for-money exercise".

Mothibi added: "All those responsible for continuing with the irregular contract should be held to account. The value-for-money investigation is ongoing."

He said the investigation had found that the contract was irregularly awarded. In 2014, Lepelle Northern Water appointed LTE Consulting Engineers on a R100m contract to improve the water supply in villages in the Mopani district municipality.

Mokonyane instructed Lepelle to appoint LTE on an emergency basis, bypassing tender processes. Lepelle officials later piled a slew of other bulk water contracts on LTE, bringing the total cost to R2.2bn.

LTE, which could'nt do the work itself, subcontracted Khato Civils and South Zambezi to do it.

In January last year, amid a cash crisis in the department which left it unable to pay creditors, Khato Civils walked off-site because LTE owed it R300m. By then it had laid hundreds of kilometres of pipes.

Water & sanitation spokesperson Sputnik Ratau could not be reached for comment yesterday.

Briefing MPs in November, department director-general Mbulelo Tshangana said Khato Civils left the pipeline 95% complete. Though the contract was flawed, it did not mean there had been no value for money, he said.

The Sunday Times understands the department has reached a settlement with Khato Civils and paid its debt to the company.

In November 2018, the SIU issued summons in the high court in Polokwane to recover R2.2bn from LTE. Other parties in the case include Khato Civils, South Zambezi, Lepelle, the municipality and the department. On Friday, Mothibi said the SIU's full court papers were ready.

On the appointment of LTE, Mothibi told the Sunday Times: "They [the department and Lepelle] did not comply with the Public Finance Management Act, they did not comply with their own procurement processes, and the question is why such amount of non-compliance and disregard of the law?

"At face value, there was no value for money on the extra R1bn spent on the project."

The SIU has asked President Cyril Ramaphosa to proclaim a new investigation into how Lepelle and Eastern Cape utility Amatola Water blew more than R500m on drought-relief technology without following tender processes.

Lepelle and Amatola allegedly flouted tender rules when appointing a company to pilot a technology that enables water to be sucked out of dry riverbeds, the document shows.

Mothibi also updated MPs on a series of investigations involving hundreds of millions of rands of corruption in the department, including a R1bn SAP software purchase.

The SIU found R285m of fruitless and wasteful expenditure on the SAP project. It is heading to court to have the contract declared invalid. Other matters have been referred to the Asset Forfeiture Unit and SIU has instituted civil actions to recover some of the money.

Mothibi told MPs he was frustrated that the National Prosecuting Authority had made little progress in numerous cases prepared by the SIU.