The R22m Mhlatuze Water CEO
Removing former chief, suspended for three years for tender irregularities, costs dearly
THE newly appointed board of Mhlathuze Water has told Parliament the removal of former chief executive Sibusiso Makhanya, suspended on full pay for the past three years, has cost the entity R22 million.
The board appeared before Parliament’s water and sanitation committee where it presented its annual report for the 2017/2018 financial year.
The water company’s board, appointed in December by Water and Sanitation Minister Gugile Nkwinti, said it had a tough journey ahead turning around the entity’s finances.
Mhlathuze Water chairperson Thabi Shange said: “There have been court cases and over three years the cost, including the interim chief executive’s salary and legal costs, is R22m.
“That was quite scary for us because when we first engaged with the incumbent, who was under suspension, we struggled. The decision was then taken by the board that his contract, which will terminate this September, must terminate so that we begin the process of stabilising the entity. This was one of the major challenges that the new board was faced with,” said Shange.
Makhanya was placed on suspension by the previous board of Mhlathuze Water after a forensic investigation made findings of impropriety and tender irregularities against him.
The board and Makhanya have been involved in a series of court battles, until the board in January took a decision to axe him following “further allegations of misconduct relating to impropriety, maladministration and tender irregularities”.
The board’s interim chief executive, Mthokozisi Duze, said they had started the process of appointing a new chief executive in December.
“There were issues that were inherent in the risk registrar and were picked up by the Attorney-General, one of those being the issue of the suspended former chief executive and the implications this had on the board’s financial commitments, paying the bills while the incumbent was sitting at home,” Duze said.
The entity racked up R265m in irregular expenditure and R25m in fruitless and wasteful spending.
Nkwinti, however, said he was confident in the board, and that it was more than capable of overcoming its current challenges. “I am convinced that the issue of the former chief executive is a very difficult one, but the manner in which they are managing the matter shows they will succeed.
“What I like about this board is that they are not defensive. They will admit where things have gone wrong.
“Because there is executive authority, the functionality of the officials will overcome the issues that were raised by the AG,” said Nkwinti.
Despite these challenges, the board told the committee that its surplus for the year had increased by 22%.
The entity also received a qualified audit opinion for the current financial year.