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

Pretoria News - - BUSINESS REPORT - ED­WARD WEST ed­[email protected]

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 R50 mil­lion 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 R4 bil­lion 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 1 000 staff, 40 per­cent 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.”

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