The De Hoop Dam in Sekhukhune, Limpopo –inaugurated by President Jacob Zuma amid great fanfare ahead of South Africa’s recent election – has been dubbed a financial “disaster” that is three years behind schedule and almost R2-billion over budget.
The dam was reportedly singled out by the ANC during its election campaign as one of its “bragging projects” – to showcase the Zuma government’s achievements.
However, an anonymous but apparently well-informed source has alleged to amaBhungane that the construction was a “disaster from the start”.
The source blamed the water affairs department for awarding the contract to its own “hopelessly inefficient” construction directorate, rather than putting it out to commercial tender.
This led to “horrendously conservative design decisions”, chosen in defiance of the recommendation of an expert panel.
Price-tag ballooned to R3.5-billion
This claim has been independently backed up by two engineers familiar with the project. Both asked not to be named.
Adding to the cost was an expensive scheme to relocate households from the dam site. The source said the department’s report on the preferred dam type estimated the cost at R781-million, based on the 2005 costs.
The contract was awarded in May 2007 for double this amount – R1.53-billion, including VAT.
When Zuma opened the dam in March this year, the price was R3.5-billion.
And although the project was initially due for completion in 2011, the source said construction activities “are still limping along, and are likely to do so at least until the end of the year”.
The source said a key reason for the cost overrun had been the department’s decision to use roller-compacted concrete for the left-flank embankment of the dam, instead of rock fill – thereby adding R100-million to the cost.
“Even the parking area on top of the right flank of the dam has more than a metre-thick layer of mass concrete under it,” he said.
Department ignored external advice
Two engineers familiar with the matter confirmed to amaBhungane that an external departmental review panel had recommended rock-fill construction for the left-flank embankment, but the department had ignored this and opted for concrete.
Because of this, excavations for the foundations of the concrete embankment on the left flank were 8m deeper than they would have been otherwise.
One of the engineers agreed that this approach added about R100-million to the cost.
He told amaBhungane: “They could have subcontracted construction of the rock-fill embankment, and could have saved 10% of the cost at that stage.”
The engineer claimed the department gave spurious reasons for rejecting the review panel’s recommendation, claiming that there was not enough rock to build a rock-fill wall. He said quarry and clay were available.
But he stressed that a review panel provides recommendations only and it is not mandatory for the department to follow them.
The department’s spokesperson, Sputnik Ratau, said the review panel recommended a composite dam “based on their experience of the 1970s and 1980s in South Africa, which was not the justifiable first choice of the approved professional person [APP]”. The APP is a geotechnical engineer employed by the department.
But the independent engineer disputed this characterisation: “The rock-fill method is no more old-fashioned than building a house with bricks.”
The department’s reasoning
Ratau said the panel’s option would have had “inordinate risk of damage and substantial losses of time, cost, human life and environmental degradation”.
He ascribed the price overrun and delays to a number of factors including additional quantities of work, variations in the scope, labour unrest and community demands.
Without offering an explanation, Ratau said that earthworks quantities had dramatically increased from 313450m2 to 724010m2, and concrete from 580745m2 to over a million cubic metres, leading to a higher contract cost.
A 2010 civil engineering magazine article on the dam said the foundation conditions were “not as good as expected”, which resulted in the need for further excavation to “competent rock levels”.
The project’s main objective was to supply downstream users with water from the dam by April 2011.
Ratau said the additional work had led to a revised date for water delivery to January 2013: “Actual delivery of water was achieved by October 2012.”
He said the overall dam completion is set for the end of November.
The dam was built as part of the Olifants River Water Resources Development Project, one of the presidential infrastructure co-ordinating commission’s strategic infrastructure projects, aimed at fast-tracking development and growth.
Other reasons cited by the anonymous source for the cost overrun included:
• The construction division had motivated massive bonuses to accelerate construction; and
• The “astounding” quantity of plant and equipment brought on to the site “would have bankrupted any commercial contractor”.
Ratau said the strategic committee had given preference to the department’s construction unit because it offered “the most efficient funding model” and avoided a “time-costly procurement process”.
He said bonuses were paid to the employees of the construction team as part of “an acceleration agreement”. The workers had to work 12-hour shifts seven days a week.
Regarding the cost of relocating 38 households displaced by the dam, housing industry pundits said that the R100-million price paid by the department was excessive.
The contract, which works out at more than R2.6-million a household, went to a joint venture led by a Limpopo company, Rendeals Four Consulting.
Rendeals referred all requests for comment to the department.
Construction company owner Peter du Plessis told amaBhungane that in his professional opinion the job should have cost no more than R12-million.
He said he had considered the project but decided not to bid because of “severe ambiguities in the request for a proposal”.
Ratau said the department had negotiated Rendeals down from an initial price of R117-million. He added that the project was in a remote rural area and the price included the cost of water, electrical and sanitation bulk infrastructure.
The houses provided for the displaced people comprised “four bedrooms, a living area, a bathroom, a toilet and a kitchen, with water, sanitation and electricity services” on a 1 000m2 stand.
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