A source with intimate knowledge of the process said the SIU was looking at the awarding of the social facilitation contract to Sibonelo Shinga’s MPS Strategic Solutions (MPSSS) by former Umgeni Water’s chief executive, Thami Hlongwa (above).
The Special Investigating Unit (SIU) wants to recover R138 million paid to one of murdered tenderpreneur Sibonelo Shinga’s companies for a five-year social facilitation contract by the embattled Umgeni Water Board.
The SIU is also probing a R85 million a year, five-year security contract awarded by the entity to Tactical Security Solutions, the security company run by Adriaan Snyman, bodyguard to Economic Freedom Fighters leader Julius Malema, in August 2021.
On Friday, President Cyril Ramaphosa signed off on a new proclamation which allows the SIU to investigate alleged corruption and maladministration in the two contracts at Umgeni. The proclamation also empowers the unit to take legal steps to recover any money paid irregularly, to either of the companies, in the duration of their contracts with Umgeni, along with another five contracts it had identified earlier as potentially fraudulent.
The Mail & Guardian understands that both transactions were red flagged by the SIU during an earlier investigation it conducted at Umgeni, but the terms of reference did not allow the unit to act on the information it uncovered at the time.
Umgeni, which provides water to the majority of KwaZulu-Natal’s population, is in the process of being merged with Mhlathuze Water, which services the northern section of the province, into a single entity, Umgeni-uThukela Water.
The water board racked up R2 billion in irregular expenditure in 2021 and 2022, which is understood to include the contacts being investigated by the SIU.
The two contacts were awarded during the tenure of the outgoing board, led by chairperson Gabisile Mathenjwa, which was fired by water and sanitation minister Senzo Mchunu earlier this year.
The board had been removed by Mchunu’s predecessor Lindiwe Sisulu, before being reinstated by a court. Board members have approached the high court to have Mchunu’s decision to act against them set aside and to have the board of the new entity dissolved until their matter is resolved by the courts.
The SIU proclamation, which covers the period from 1 March 2018 to 2 June 2023, empowers the investigating unit to “recover any financial losses suffered by the state through corruption and negligence”, spokesperson Kaizer Kganyago said.
“The investigation will delve into any improper or unlawful conduct by officials or employees of the Umgeni Water Board or the state, the applicable service providers, or any other person or entity in relation to the allegations.”
Kganyago said the SIU was empowered to approach the high court or its special tribunal to “correct any wrongdoing uncovered during its investigations caused by acts of corruption, fraud or maladministration”.
The SIU would also refer any evidence pointing to criminal conduct to the National Prosecuting Authority for prosecution.
A source with intimate knowledge of the process said the SIU was looking at the awarding of the social facilitation contract to Shinga’s MPS Strategic Solutions (MPSSS) by former chief executive Thami Hlongwa.
Hlongwa resigned in 2020 shortly before the board appointed by Sisulu was set to table a forensic report into the contract and others signed with companies owned by Shinga, who had allegedly paid for a birthday party for the chief executive in Cape Town.
Umgeni subsequently terminated contracts with MPSSS and Raminet Technologies, both owned by Shinga, who was shot dead in Durban in January 2021 after attending a family funeral. No arrests have been made in connection with his shooting, after which Hlongwa, who is understood to have survived an attempted assassination, went underground.
MPSSS went to court to challenge the termination of the contract and was reinstated to provide the facilitation services, for which it is understood to be paid a percentage of the overall project value.
The suspect payments to MPSSS are assumed to include R54 million for three months of facilitation work in communities living in areas affected by Umgeni water reticulation projects near Umkomaas on the South Coast during the Covid-19 lockdown period.
At the time, a whistleblower at Umgeni wrote to Sisulu exposing the relationship between Hlongwa and Shinga, whose Raminet Technologies was one of the companies blacklisted for being involved in corruption involving technology giant EoH.
The MPSSS contract is understood to have been identified first by the SIU when it was investigating information technology contracts at Umgeni under the earlier proclamation.
The R220 million security contract being probed by the SIU was awarded to Reshebile Aviation and Security Services in 2018 but the award was set aside after a court challenge by Excellerate Services, the previous contractor, over a flawed procurement process.
Reshebile’s guards remained in place until August 2021 while the contract was re-advertised and eventually awarded to Tactical Security Services, owned by Snyman.
Tactical’s staff are still providing the service guarding Umgeni’s dams, pump stations and offices, after an unsuccessful court application by Reshebile in October that year to interdict the process.
The fired Umgeni board’s application for an interdict against Mchunu is expected to be heard by the Pietermaritzburg high court on Friday.
Last month, members of the Amatola Water Board, fired by Mchunu in March, were reinstated by the high court in Makana.