Court ruling for ‘captured’ water entity
Umgeni Water cannot suspend contract and SIU probes others linked to slain man’s companies
The high court has halted attempts by Umgeni Water to suspend an allegedly unlawful R138-million contract with a company owned by information technology magnate Sibonelo Shinga, who was murdered in January.
Last month lawyers for MPS Strategic Solutions, one of several companies owned by Shinga that hold lucrative contracts with the water provision entity, secured an interim order preventing Umgeni Water from temporarily suspending the R141-million contract.
The contract was awarded early in 2020 during the term of former Umgeni Water chief executive, Thami Hlongwa, who resigned last October under a cloud of allegations of corruption involving Shinga’s companies, ahead of the tabling of a damning forensic audit.
MPS was last year paid R54-million for a three-month social facilitation project and R87-million for an eight-month security assessment, the first part of a four-phase, long-term contract.
In December, whistleblowers at Umgeni Water wrote to then water and sanitation minister Lindiwe Sisulu claiming that the entity had been “captured” by Shinga, who had paid for a lavish birthday for Hlongwa in Cape Town the year before.
They also wrote to the Special Investigating Unit (SIU) about the contracts.
Shinga was shot dead on 26 January in an apparent assassination on the freeway, after attending a family funeral in Durban.
Hlongwa disappeared at about the same time, with colleagues and associates saying he had gone into hiding because he was afraid of being killed.
Police spokesperson Colonel Thembeka Mbhele confirmed that no arrests had been made in connection with Shinga’s assassination. “The matter is still under investigation.”
In June, Umgeni Water moved to suspend the MPS contracts temporarily, pending a forensic audit. The entity is also reviewing the IT contract held by Shinga’s other company, Raminet Technologies, which was ceded from the controversial IT giant, EOH, in 2017.
Lawyers for MPS went to the high court in Pietermaritzburg to interdict the suspension of the contracts and were granted an interim order. The matter was adjourned to 9 September.
Although neither of the two existing SIU proclamations pertaining to IT and other contracts at Umgeni and other water entities covers the contracts awarded to MPS, they are on the investigating unit’s radar.
SIU spokesperson Kaizer Kganyago said the proclamation issued on 30 July focused on four contracts awarded to EOH Mthombo (Pty) Ltd totalling R474-million, but did not cover Raminet or MPS. Neither did the 2019 proclamation. But the SIU was assessing the allegations made by whistleblowers about the contracts, he added.
“I am informed that these allegations have been received by the SIU Kwazulu-natal and submitted to the business development team for development and escalation to the case assessment committee.”
Umgeni Water is also reportedly reviewing the IT contract awarded to Raminet. EOH has subsequently blacklisted Raminet as part of its attempt to clean up its image, tainted by allegations of state capture that emerged at the Zondo commission.
The water entity has also moved to implement a high court order setting aside a R220-million security contract with Reshebile Security and Aviation Services.
Last July, the court gave Umgeni 10 months to appoint a new service provider to replace Reshebile, which had “piggybacked” on the monthto-month contract awarded to its predecessor, Excellerate Security Services.
Umgeni Water’s communications head, Shami Harichunder, confirmed that a rule nisi had been granted in favour of MPS stopping the entity from temporarily suspending its contract.
Harichunder said the contract with Raminet Technologies “is presently under review”.
With regard to Reshebile, Harichunder said Umgeni Water had gone back to court for additional time to appoint a new security service provider and had been granted the extension.
A new service provider would be announced soon.
“In its ruling the high court allowed Umgeni Water 10 months to appoint a service provider. Reshebile Aviation and Protection Services was allowed to continue providing security services to Umgeni Water pending finalisation of the appointment process,” Harichunder said.
“The process for appointment of a service provider has been completed and is in line with the Public Finance Management Act, as it pertains to open, transparent, fair and competitive bidding. An announcement on the successful tenderer is imminent.”