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Umgeni water board overhaul imminent

A major shake-up of political board appointees at Umgeni Water and other water and housing entities appears to be on the cards after last week’s cabinet reshuffle, which saw the water and sanitation and human settlements minister, Lindiwe Sisulu, moved to the tourism portfolio.

The amalgamation of water and sanitation with human settlements portfolios into a single ministry in 2019 was reversed. Senzo Mchunu was moved from the public service and administration department to the water and sanitation ministry and Mmamoloko Kubayi-Ngubane was moved to the human settlements component from the tourism department.

The human settlements department has been plagued by corruption scandals, including claims that Sisulu had used the department’s resources to appoint people central to her plan to contest the ANC presidency next year. Sisulu cleaned house in a number of entities across both human settlements and water and sanitation after her appointment, making a series of appointments that included key leaders of the radical economic transformation faction in the ANC.

Among these are former ANC Youth League leader Magasela Mzobe, who chairs the interim board at Umgeni Water, and ANC Women’s League president Bathabile Dlamini, who Sisulu appointed to head the interim board at the Social Housing Regulatory Authority. Sisulu also appointed a National Rapid Response Task Team at a cost of R13.9-million, which her critics in the department claimed had been installed to run her campaign for the ANC presidency in 2022 at taxpayers cost. 

Mchunu has started meetings with water and sanitation senior management and has asked to meet Umgeni’s interim board — appointed by Sisulu after she dissolved its existing board last July — and those of the other water entities next week.

A source said Mchunu wanted to ensure proper corporate governance in the entities — a number of which have had key projects stalled over legal challenges to tender awards — to clear delivery backlogs. “He has already asked to meet the interim boards and members of some of the boards which were disbanded … The boards are worried. None of them have been ratified by cabinet, which was the rationale applied by Sisulu in her justification for disbanding [them],” the source said.

At Umgeni Water, three key wastewater projects with a combined value of R2.5-billion have been halted by legal challenges to the tender awards, which a forensic audit has identified as being unlawful, recommending criminal action against officials including the former chief executive, Thami Hlongwa. He has been in hiding since February, when he survived an alleged assassination attempt after the murder of tenderpreneur Sibonelo Shinga.

Shinga’s companies, Raminet Technologies and MPS Strategic Solutions, hold information technology contracts valued at more than R140-million with Umgeni Water, despite being blacklisted for corruption by service provider EOH. Raminet acted as an implementing agent for EOH at Umgeni Water. The tender was among those covered by the presidential proclamation issued last week empowering the Special Investigating Unit (SIU) to probe IT contracts between EOH, third party entities and water and sanitation valued at R474-million.

Umgeni Water has an additional R220-million headache after failing to implement a court order compelling it to secure a new service provider to replace Reshebile Security and Aviation Services after the existing contractor successfully challenged the award. A source said Reshebile was still on site and being paid on a month to month basis.

In a statement last month, Umgeni Water confirmed the forensic audit into the three tenders that had been subjected to “protracted and costly” court cases. These had resulted in vital projects being delayed and had necessitated a review of the entity’s supply chain management processes.

Umgeni Water said the SIU investigation proclaimed in January 2019 into emergency water projects was underway. The entity would also appoint a legal expert to oversee implementing recommendations from the SIU and the forensic auditors. This person would also provide evidence Umgeni Water had of alleged mismanagement of funds and other violations of the Public Finance Management Act.Umgeni Water’s troubles do not end there. Former board member Visvin Reddy and his colleagues have challenged their removal — and the appointment of an interim board by Sisulu — in the high court, Pietermaritzburg. Judgment was reserved in the matter after it was argued in June and is expected soon.

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Paddy Harper
Paddy Harper
Storyteller.

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