R200m in taxpayers' money down the drain

The pipes that were left on the side of the road in 2010.
The pipes that were left on the side of the road in 2010.

Thanks to a bungled tender process, water pipes that cost South Africans more than R200m are now unusable after having being left to rot on the side of a road since 2010.

The steel pipes, which have a cement mortar lining, were supposed to channel water from the Nandoni Dam outside Thohoyandou, to Nsami Dam in Giyani, Limpopo.

This would have allowed residents of Giyani and about 90 surrounding villages access to fresh water.

But the Mopani District Municipality was forced to leave the pipes on the side of the R524 between Thohoyandou and Giyani.

This after a company, Esorfranki Pipelines, went to the Supreme Court of Appeal to challenge the council’s decision to award the tender to Tlo Re Yeng and Base Major Joint Venture.

In March 2014, the SCA ruled that the tender process was illegal.

Mopani cancelled it and in 2015, the Department of Water and Sanitation (DWS) took over the process and appointed Vharanani Properties, owned by Limpopo businessman David Mabilu, to install the 51km pipeline.

The department imported the new pipes for the DWS project from Spain at a cost of an additional R100m.

The new pipes also now run the risk of degrading on the side of the road as Vharanani Properties abandoned the construction site eight months ago after the department failed to pay the company.

The sordid tale of how R200m was wasted – and how a further R100m stands to flow down the drain – was told to City Press by several sources in the DWS, and others close to the botched tender.

Vharanani Properties’ operations director Chris Mthombeni said: “We left the site in February. But the pipes have been lying there for over a year. They owe us about R40m.

"We could go back to the site, if we ever go back, to find that the pipes are no longer fit for purpose. The department will have to pay another R100m to buy new pipes.”

While the new plastic pipes were strong and durable, Mthombeni said if they are exposed to the sun and rain for extended periods, they will eventually be damaged.

An experienced engineer told City Press: “PVC water pipes are designed to be underground. If they are exposed to the sun and rain, they will wear out and be damaged quickly.”

Mthombeni said it was critical that the project was completed soon as the success of the DWS’s controversial R5bn emergency water project in Giyani depends on the pipeline.

“The two projects are linked in that when the Nsami Dam is low, water will be drawn from Nandoni, which is almost always full, to supplement it.

So, all the work being done in Giyani very much depends on this pipeline,” he said.


Meanwhile, construction on the DWS’s controversial R5bn project in Giyani has stopped.

Official letters between Khato Civils, Lepelle Northern Water and the contract holder LTE Consulting, obtained by City Press, indicate that construction firm Khato Civils stopped work about a month ago after its sister company, South Zambezi Engineering, was not paid R50m.

Both companies are owned by businessman Simbi Phiri.

In a series of reports since February last year, City Press exposed how in August 2014, the DWS, through its agent Lepelle Northern Water, awarded a R500m emergency water project without going to tender.

The department awarded the contract to LTE, whose boss, Thulani Majola, is close to Water and Sanitation Minister Nomvula Mokonyane.

LTE in turn appointed Phiri’s companies to do both the engineering and construction work. The department then piled more projects on to the contract, bringing the value of work awarded to LTE to more than R5bn.

South Zambezi’s projects director Makoko Makgonye said: “After exchanging numerous letters with Lepelle Northern Water, we had to withdraw our engineers from the site.

"They have paid Thulani who doesn’t even have a single engineer on site. We have a payment cession agreement that whatever payment is due, half goes to LTE and the other half comes to us.

"But [Lepelle Northern Water chief executive Phineas] Legodi pays LTE, which didn’t do any work and has no employees on the ground, but he ignores us.”

This time around, said Makgonye, it is not the department that is not paying, but Lepelle Northern Water.

Khato Civils chief executive Mongezi Mnyani said the company had to stop construction because, after South Zambezi’s withdrawal, there was no one to supervise it.

“There is no way you can continue with construction on a project of this size without supervision; it is risky,” he said.

Mnyani said he had planned to finish four of the eight pipelines by the end of September.

“We have all the resources, material, personnel and plant on site. So you cannot say Khato has failed,” he said.

“And we had planned to connect four of the eight major pipelines to reservoirs by the end of September, but it obviously won’t happen now.

"The project’s timelines have now been compromised. We wanted to finish connecting all eight pipelines by the end of January, but the new projection is now end of April, and that is if things are sorted and we return to the site soon.”

Legodi referred all queries to the department.

But a senior DWS executive said Legodi was not the problem and he was “extremely happy with Khato Civils and South Zambezi’s performance”.

He alleged the project is being held up by Majola who is delaying payment approvals and now “disputing the signature of his engineer in the last payment certificate”.

Approached for comment, Majola said he had replaced South Zambezi’s engineers with “suitably qualified people”. He said South Zambezi had not been paid because the department had not paid him as the owner of the contract.

DWS spokesperson Sputnik Ratau said the department knew about South Zambezi’s withdrawal, but “Lepelle Northern Water is ensuring that all work continues”.

“The department became aware of this two weeks ago and is satisfied that the matter is receiving the required attention while all construction activities continue,” he said.

“The department does not interfere in the contractual relations of Lepelle Northern Water and its service providers.”

Ratau said the Mopani District Municipality initially implemented the project and the department “cannot comment on amounts of money spent on the procurement of incorrect pipes”.

“In 2014, the High Court instructed the department to take over the project. The project, which includes the construction of a 60km pipeline, was therefore never aborted and is currently managed by Lepelle,” he said.

“All payments effected to service providers by Lepelle correlate with the progress on site and work is currently still underway. There are therefore no risks of damage to material by the elements as the material does not ‘lie there for months on end’.”

Lulu Johnson, chairperson of parliament’s portfolio committee on water and sanitation, said his committee was impressed by the project’s progress.

“What you are telling me is disturbing as the committee visited the site two months ago and we were all impressed by the standard and quality of work delivered by the construction company,” he said.

“The people of Giyani have suffered enough. The department should sort out the mess so that the project is finished.”

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