Wa­ter board ‘open to graft’

CityPress - - News - SIPHO MASONDO sipho.masondo@city­press.co.za

Wa­ter and San­i­ta­tion Min­is­ter Nomvula Mokonyane’s seizure of power at Um­geni Wa­ter and the sus­pen­sion of its chief ex­ec­u­tive has raised fears that doors have been opened for lu­cra­tive con­tracts to be awarded to those who are po­lit­i­cally con­nected.

This week, Mokonyane in­formed board mem­bers, whose four-year term ended on Fri­day, that she would not ex­tend their con­tracts. Two weeks ago, the board sus­pended the en­tity’s head, Cyril Gamede, fol­low­ing al­le­ga­tions of ten­der cor­rup­tion con­tained in an anony­mous let­ter.

How­ever, in­ter­nal emails and let­ters ob­tained by City Press re­veal that Mokonyane did not want Gamede to con­tinue as Um­geni’s chief ex­ec­u­tive and that the anony­mous let­ter im­pli­cat­ing him in cor­rup­tion may have been man­u­fac­tured.

The same doc­u­ments show that, in Septem­ber, Um­geni Wa­ter’s board ex­tended Gamede’s con­tract by two years. Last month, Mokonyane wrote to the board, in­form­ing it that Gamede’s con­tract should not be ex­tended. She also re­minded the board that, ac­cord­ing to the Na­tional Wa­ter Act, she had the power to ap­point and axe the heads of wa­ter boards. In the let­ter, Mokonyane wrote: “It should be noted that, in terms of the draft hand­book for the ap­point­ment of per­sons to boards and chief ex­ec­u­tives of state con­trolled in­sti­tu­tions, I, as an ex­ec­u­tive au­thor­ity, have the fi­nal dis­cre­tion to de­cide and ap­prove … In light of the above, I de­cided not to re­new the con­tract of Mr Gamede as the chief ex­ec­u­tive of Um­geni Wa­ter.” How­ever, the board sought a le­gal opin­ion, which ad­vised that “ev­ery wa­ter board must ap­point a suit­able per­son as chief ex­ec­u­tive of the wa­ter board for a re­new­able pe­riod”. A board mem­ber said: “It was on this ba­sis that we ap­pointed Gamede for a fur­ther two years.” A con­fi­den­tial let­ter writ­ten by Gamede last month to for­mer board chair­per­son Andile Mahla­lu­tye, which City Press has ob­tained, in­di­cates that one of Um­geni’s board mem­bers told Gamede that if he didn’t pay a cer­tain ser­vice provider, some­body would write to Mokonyane and com­plain about him.

In the let­ter, Gamede writes: “I was very con­cerned that I was threat­ened by a let­ter to be writ­ten to the min­is­ter, and now there is a hot­line to the min­is­ter. This can­not be a co­in­ci­dence.”

A se­nior gov­ern­ment of­fi­cial close to Mokonyane said Gamede was re­garded as a “stum­bling block” who had “con­stantly re­fused to talk to ser­vice providers about ten­ders”.

Sources close to Gamede said that, since the be­gin­ning of the year, he had been in­un­dated with calls from po­lit­i­cally con­nected busi­ness­peo­ple who knew what con­tracts were com­ing up for ten­der at Um­geni well be­fore they were ad­ver­tised.

The board mem­ber said: “There is a lot of money at Um­geni. But for politi­cians to cap­ture it, they have to get rid of Cyril and Mahla­lu­tye.”

Last year, City Press re­ported that Mokonyane was push­ing ahead with the merger of Mh­lathuze and Um­geni’s wa­ter boards, de­spite mis­giv­ings by Treasury. In a strongly worded let­ter in Septem­ber 2015, for­mer Treasury di­rec­tor-gen­eral Lungisa Fuzile warned for­mer wa­ter and san­i­ta­tion di­rec­tor-gen­eral Mar­garet-Ann Diedricks that merg­ing the wa­ter util­i­ties could ex­pose Um­geni “to se­ri­ous risk, in­clud­ing a credit down­grade”.

Um­geni has a R600 mil­lion loan from the Euro­pean In­vest­ment Bank and has is­sued bonds in ex­cess of R600 mil­lion. Fuzile also told Diedricks that cred­i­tors could see the merger as a dis­es­tab­lish­ment of Um­geni, and de­mand that their loans be re­paid im­me­di­ately.

City Press fur­ther re­ported last year that Mokonyane had ap­pointed Dudu Myeni – con­tro­ver­sial chair of SAA and the Mh­lathuze Wa­ter board, and an ally of Pres­i­dent Ja­cob Zuma – as chair­per­son of the in­terim board that would over­see the merger of Um­geni and Mh­lathuze. In Novem­ber, the Pi­eter­mar­itzburg High Court or­dered that Myeni not be al­lowed to serve a third term as chair of Mh­lathuze Wa­ter and that she should leave when her term ex­pired. Mokonyane has dis­solved that board, and it is not yet clear whether Myeni would be el­i­gi­ble to serve on the board of any new en­tity.

A se­nior ex­ec­u­tive at Um­geni said there were two ma­jor ten­ders in the works at Um­geni, which politi­cians and busi­ness­peo­ple were po­si­tion­ing them­selves for.

“There is a mas­sive R18 bil­lion ten­der com­ing up at Umkhomazi for bulk wa­ter pro­vi­sion, and there is also a de­sali­na­tion plant that is ex­pected to cost up­wards of R6 bil­lion,” the ex­ec­u­tive said.

Mokonyane’s spokesper­son, Mli­man­dlela Ndamase, said: “Pro­cesses re­lat­ing to the ap­point­ment of a chief ex­ec­u­tive are un­der­taken by the board and fi­nalised in con­sul­ta­tion with the min­is­ter. The board is aware that, when it so­licited the views of the min­is­ter on the ex­ten­sion of the con­tract of Mr Gamede, the min­is­ter ad­vised that, given the pro­cesses an­nounced in 2015 on the es­tab­lish­ment of a sin­gle wa­ter board for KwaZulu-Natal, it would be inad­vis­able to ex­tend such a con­tract with­out an as­sess­ment on progress made to­wards the sin­gle agency.” On Mokonyane’s re­moval of the board, Ndamase said: “The board’s term of of­fice ex­pired on June 30. The min­is­ter has not ter­mi­nated the board; rather its term has ex­pired. To this end, a process to ap­point a new board has com­menced and will be ex­pe­dited to en­sure sta­bil­ity at the util­ity.” Mahla­lu­tye and Gamede de­clined to com­ment.

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Cyril Gamede

Nomvula Mokonyane

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