THE alleged corrupt relationship between the Lepelle Northern Water (LNW) officials, service provider and departments officials is the reason people in Giyani still have no water.
The Special Investigating Unit (SIU) investigation has revealed that the Giyani Water Bulk project cost was increased from the approved project budget of R90 million to R2,2 billion.
This was done without the approval by the minister of water and sanitation.
SIU head Andy Mothibi told the Standing Committee on Public Accounts (Scopa) on Tuesday, 14 November that the minister has issued a directive on 25 August 2014, which was not extended, to include non-emergency projects.
He said LNW contracted LTE to resolve water challenges in Giyani.
LTE was initially appointed on an emergency basis on 20 August 2014 for the repair and refurbishment of the water and waste-water works for the value of R90 million.
On 25 September 2014, LNW appointed LTE again and this time for non-emergency works to the value of R2,2 billion excluding tax.
“It should be noted that no procurement processes were followed when the project was extended from R90 150 000 to R2,2 billion,” said Mothibi.
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He pointed out that the SIU was of the view that if a new directive was issued to include the non-emergency works, LNW would have been required to go out on a competitive bid.
“Our investigation revealed that the second appointment was concluded without following any SCM (supply chain management) processes. The project cost was increased from the approved project budget of R90 million to R2,2 billion. This was contrary to the directives of the minister, and without an approved budget plan,” he said.
He told Scopa that the appointment of LTE by LNW at a contract value of R2,2 billion was irregular and unlawful as it was concluded without due regard to section 217 of the Constitution, the LNW supply chain management policy and the directives of the minister.
The investigation further found that LTE was not registered with the Construction Industry Development Board to undertake or carry out construction work for public sector contracts, and LNW was prohibited to appoint a contractor to carry out construction works without a valid registration certificate issued by the board.
The Giyani Water Treatment Works should have been completed by no later than 30 September 2014. Mothibi said the 167 boreholes installed by the service provider were overpriced by R7 million and non-functional water purification plants were charged at R2 500 000.
He said the SIU successfully submitted court applications to the Special Tribunal to preserve LNW CEO Phineas Legodi’s pension of R2 463 341 and four immovable properties have been frozen.
Another implicated official, Carel Schmahl, also has pension valued at R10 million frozen.
