Umgeni, the country’s second-largest water board, supplies municipalities in KwaZulu-Natal and parts of the Eastern Cape and has been rocked by allegations of corruption and mismanagement for nearly a decade. Photo; Supplied
The merger of Umgeni Water Amanzi and Mhlathuze Water into a single super water board serving the whole of KwaZulu-Natal to try to address the province’s water crisis will take place by the beginning of April.
Work is already underway on disestablishing the boards of both water entities as part of a national programme initiated by Water and Sanitation Minister Senzo Mchunu, under whose portfolio the country’s water boards fall.
Mchunu has conducted a review of the country’s water boards and wants them restructured to end the “institutional confusion” created by having multiple water boards in each province.
Mchunu believes merging the two KwaZulu-Natal water boards — both of which have been dealing with crises of corporate governance in recent years — will boost efficiency in delivering the crucial resource to communities, cut corruption and help bring potable water to communities currently not serviced by either board.
Collectively, they provide around 11.1 million people around the province with water, supplying the eThekwini metro and the 10 district municipalities which reticulate water further to 43 local municipalities.
Last year, the South African Human Rights Commission (SAHRC) began hearings into the dire water situation in the province, saying complaints from communities amounted to a “prima facie violation of the right to have access to sufficient clean water”.
Mhlathuze, based in Richards Bay, serves the north of the province, while Umgeni provides water to eThekwini and KwaZulu-Natal’s southern and western district municipalities.
Umgeni has been the subject of a series of investigations by the Special Investigating Unit (SIU) over alleged corruption in social facilitation contracts during the Covid-19 lockdown period and a damning forensic audit into its former chief executive, Thami Hlongwa.
Hlongwa resigned before the Umgeni board could act against him over the report, which was sparked by his allegations that he had received bribes from companies owned by murdered tenderpreneur, Sibonelo Shinga.
Last month, Umgeni’s leadership refused to provide details of irregular expenditure totalling R150 million in its annual results, along with historical irregular expenditure of nearly R1.9 billion, saying that it could not do so because of legal processes which were underway.
Mhlathuze recently parted ways with its chief executive Mthokozisi Duze and chief financial officer Babongile Mnyandu, who are out on bail for around R37 million which was illegally paid to lawyers for services they did not provide.
Duze survived two internal investigations before being suspended last year as a result of a third, which led to him and Mnyandu resigning in November.
Mchunu believes merging the boards will allow them to rationalise their assets and skills and improve oversight, and, with it, the delivery of water in a province which is battling with supply crises in almost all its districts and in eThekwini.
In a notice gazetted in November, Mchunu said that Mhlathuze’s assets, staff and liabilities would be transferred to Umgeni, whose area of operation would now be extended to take in that previously covered by Mhlathuze.
A single water board would allow the entities to “consolidate their assets and skills for key infrastructure development and access to water for the entire province”, the notice said.
A single board would be able to leverage finance better; would also assist in bringing water to areas which were currently not serviced and in ending the “institutional confusion” caused by the existence of multiple water boards in each province.
In a letter to both boards on 1 February, Mchunu said that a moratorium had been placed on any new appointments ahead of the restructuring process, which was expected to be completed by the end of March this year.
“The reconstitution process will lead into consolidating the staff and assets of both entities, a new board, a new mandate and footprint. It is therefore not prudent to fill executive positions without conducting the due diligence of staff at both entities,” he said.
“The moratorium put in place remains in effect, and the two entities may not fill any vacant positions,” Mchunu said.
A source at Umgeni, who asked not to be named, said that while the merger of the two boards was a “good thing” it would create a situation where consumers who fell under Umgeni would end up subsidising their counterparts from Mhlathuze, who paid less for water.
“It is a good thing to have one water board to serve the whole province, but a different thing to have Umgeni water, that gets 80% of its revenue from eThekwini, basically subsidising municipalities who are battling themselves,” the source said.
Mchunu’s spokesperson, Wisane Mavasa,said that the process around the Umgeni-Mhlathuze merger was set to be completed by April, and the processes around the other water boards were also on track.
This included a due diligence report, setting out the financial positions of the entities and their legal responsibilities; a register of assets of both and the appointment of a new board to govern the consolidated water board.
“The processes around the mergers of the entities as announced by the minister last year are all well underway and on track. This applies not only to the merger of Umgeni and Umhlathuze water boards, but also to the expansion of a number of boards in other provinces,” Mavasa said.
These included the extension of the Lepelle Northern Water to cover the whole of Limpopo; the disestablishment of Sedibeng Water and the dispersal of its assets to other water authorities; the extension of Bloem Water to cover the whole Northern Cape and of Amatola Water to supply the whole of the Eastern Cape.
Mavasa said the process of having Rand Water expanded to cover Mpumalanga was still under way.
“Consultations are still in progress to involve all relevant stakeholders. Notices have been issued for comment, which closed at the end of January,” Mavasa said.
“Each and every part of the reconstitution of the various boards is underway and is on track for achieving the targeted completion dates.”
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