Dodgy contract for water tanks

2014-04-02 00:00

A CONTRACT to deliver water tanks to poor households across KwaZulu-Natal was severely delayed by a national housing body after it compromised its own governance policies including handing over the contract to one of its former board members.

The R97 million contract, handled by the National Home Builders Regulatory Authority (NHBRC), was found to be wanting by a leaked internal audit report, in the possession of The Witness, to have disregarded its own policies in appointing the service providers — with one of the companies belonging to a former NHBRC council member who had stepped down just a year earlier.

The audit report found the NHBRC to have not complied with the Public Finance Management Act and that the controls in place to monitor such contracts “were inadequate” and that it overpaid its contractors contrary to their own policies.

In October 2011, the NHBRC, on behalf of the Department for Human Settlements, was tasked with having 24 000 water tanks installed across almost all the districts of the province. The six-month contract was initially awarded to Johannesburg-based Hydrotek International as project manager. Hydrotek specialises in water storage tanks services.

However, in a report by Corruption Watch — a Johannesburg non-profit organisation — released last week it found that the “NHBRC eroded the role and authority of Hydrotek by allowing the installers to dictate their working terms and conditions with Hydrotek” and that Hydrotek was instructed to use pre-determined sub-contractors as installers, including Thandiwe Silinda, an NHBRC council member who resigned from the board in December 2010

Hydrotek MD Robert Mlambi admitted to serious challenges after his company was appointed to deliver the water tanks. “We were asked to use pre-determined installers. We did not have a problem with this as we needed to deliver the water tankers quickly and felt if the NHBRC had already checked the competency of these companies it would allow us to concentrate on the work ahead.

“But then the installers wanted to be paid directly by the NHBRC and this significantly delayed the process. We only managed to start installing the tankers in January 2012. We were provided no list of who the beneficiaries were, which added to the delays. When we asked for the contract period to be extended this was denied and the NHBRC took control of the contract,” said Mlambi.

According to the audit report it was at this point the NHBRC, who assumed the role as project manager, started contravening its own policies firstly by reappointing the installers — Uvuko Civils, Vuka Civils and DR Bongani Investments — the latter owned by Silinda.

The audit report — completed in March 2013 — also found:

• The contracts handed to Uvuko Civils, Vuka Civils and DR Bongani Investments had no authorisation to continue with the work;

• The installers were overpaid; and

• The installers made fraudulent claims for work completed.

The report said management should look into the claims and their impact on the NHBRC both “reputationally [sic] and financially”.

According to Corruption Watch, they visited areas where the installations had taken place and found much of the work to be sub-standard.

Silinda told The Witness she would not comment and referred all queries to the NHBRC. She was asked three times if she thought her previous role as a council member of the NHBRC may have given her an unfair advantage, however, she insisted she could not speak on the matter. She would not say if she had signed a confidentiality agreement with NHBRC.

While attempts to get comment from the NHRBC by The Witness were unsuccessful, their corporate communications manager Wanda Lubelwana told Corruption Watch that the audit report was “a work in progress paper whose findings have not been tested and/or validated”.

Lubelwana also said that the NHBRC was conducting a door-to-door verification and installers would rectify problems at their own cost.

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