File picture: Oupa Mokoena/African News Agency (ANA)
File picture: Oupa Mokoena/African News Agency (ANA)

Corruption in water sector washed away many jobs and billions of rand

By Edward West Time of article published Mar 13, 2020

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CAPE TOWN - Corruption in the water sector involving all levels of society has cost jobs and billions of rand.

Corruption Watch and the Water Integrity Network implicated tanker drivers, municipal plumbers, national ministers and directors of multinational companies in their report.

The report, released yesterday, revealed the involvement of an array of players from plumbers, tanker drivers and senior officials to mayors, ministers and the many private businesses that benefited from corruption, and in some cases actively promoted it.

It said while there was corruption prior to 2014 - investigations worth R50million were under way at the time - by the time former minister of water and sanitation Nomvula Mokonyane left in 2018, irregular expenditure had ballooned to more than R4billion with new cases being uncovered. Other abuses occurred in the provision of portable chemical toilets, the awarding of mining water licences, managing water pollution and abstraction.

The report said strategies included the capture of entire water sector organisations. But every facet of management has been exploited, including policy making, procurement, and operational and contract administration. Collusive business practices have helped to create an environment for corruption. And, even at the level of the household tap, corrupt officials have found ways to exploit people's basic needs for personal profit.

Construction of a large dam to provide Gauteng with water was delayed by years, in part because a minister sought to change procurement rules to benefit her friends.

“Companies have paid brides to get business. Some promoted unnecessary projects and claimed payment for work done badly or not at all, after colluding with individuals who oversee their work. Although some officials have resigned and often face internal disciplinary action, there have been few serious consequences,” the report said.

One specialist contractor, EsorFranki, said in its 2018 annual report that: “Alongside contract delays, non-awards and failure to implement stated policy, we have also experienced an increase in unjust tender awards that are then challenged in court. This lengthy legal and court process not only delays the contract commencement, but also incurs legal fees, impacting results.”

Aside from delays and additional costs, these problems led the firm to retrench almost 1000 staff, 40percent of its workforce.

“This was a company that made a real effort to stay in the sector. Others have just given up. Aveng, one of South Africa's top five construction companies, recently sold its water business and now intends to work on other projects, mainly outside South Africa.”

The report said leading consulting engineering firms, unable to maintain an adequate workflow, had sold out to international companies or gone out of business. They include Ninham Shand, which developed the concept for the Lesotho Highlands Project.

Another case involved Enterprise Outsourcing Holdings (EOH), which branched out into the water sector from its original IT business.

At one point it had almost 300 subsidiaries, including “a whole division that had apparently been structured to promote public sector corruption.”

“EOH’s water focus raises obvious questions. Were they really competing against each other or did they enable tender processes to be rigged, by ensuring that the key bidders were not independent but members of the same team? There are suggestions these weaknesses were profitably exploited,” the report said.

“Given the many other contracts that EOH companies had with DWS and water sector institutions such as the Water Research Commission, water boards and municipalities, there may yet be more revelations about how the company's water business really worked.”

BUSINESS REPORT 

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