Mokonyane’s Watergate

Mokonyane’s Watergate

Allegations of the Lesotho Highlands Water Project being ‘captured’ by politically connected businesses are gaining ground with a year-long delay in construction – and South Africans will be paying for rising costs

Water Affairs and Sanitation Minister Nomvula Mokonyane is set to be grilled by the Public Protector’s office this week in connection with her involvement in the attempted “hijack and capture” of the binational Lesotho Highlands Water Project by a politically connected business entity and senior politicians from the landlocked country.

Public Protector Thuli Madonsela’s office confirmed the meeting, as did Mokonyane’s spokespeople, who said she was cooperating and had “given a date to engage with the Public Protector”.

The minister is said to have personally intervened to delay the project by a year to enable the involvement in the lucrative project of LTE Consulting, a company with which she has a long-standing relationship and which is a generous funder of the ANC.

City Press has established that LTE has made donations to the ANC amounting to R3.5 million in the past two months.

The R26 billion project is aimed at building a massive dam and tunnels to ensure the continuous supply of fresh water from Lesotho to Gauteng. It is overseen by three delegates per country comprising high-level officials who form the Lesotho Highlands Water Commission, a binational structure.

The R26bn Lesotho Highlands Water Project involves the construction of a 165m dam, a 38km tunnel and the generation of hydroenergy. The project, which will be constructed inside the borders of Lesotho. South African taxpayers will fund the entire project and Gauteng water users will pay royalties to Lesotho. The scope of the project is estimated to be equal to 100 Nkandla renovations.
Commencement of work on the project has now fallen a year behind because of the delay that Mokonyane ordered.

The year-long delay of Phase Two – the first phase was in the 1980s and 1990s – means the project will only be completed in 2025 instead of 2024. As a result, the original price tag of R22 billion has surged to R26 billion.

Senior officials on both sides of the border say the delay was a deliberate ploy by Mokonyane to buy time for LTE to get involved.

It is not clear how much LTE stood to gain from the project, but the standard fee for consultants is usually 10 percent of the total cost.

LTE is already the beneficiary of R5 billion worth of projects from the department. Some of these are the subject of a special investigating unit probe, following President Jacob Zuma’s issuing of a proclamation to probe the company in April.
Between last year and this year, the South African and Lesotho governments fired officials who were seen as obstacles to enabling the deal with LTE by senior politicians and replaced them with favoured officials. City Press can today reveal that:

  •  In March 2015, Mokonyane’s director-general, Margaret-Ann Diedricks, demanded that Dr Zodwa Dlamini – South Africa’s chief delegate to the water commission – halt the project’s procurement processes, offering no reasons for this.
  •  LTE boss Thulani Majola met with Lesotho officials to demand tenders, freely dropping Mokonyane’s name in the meetings.
  •  In October, Mokonyane removed Dlamini – who has 10 years of experience in water mega-projects – from the project, offering no reasons for this. She was replaced by Gauteng’s former MEC for infrastructure development Bheki Nkosi, who served under Mokonyane when she was Gauteng premier, and worked alongside her in ANC provincial structures.
  •  Madonsela is now investigating the circumstances surrounding Dlamini’s removal from the project.

 

MINISTER: IT’S ALL ABOUT TRANSFORMATION
The department of water affairs and sanitation denied any wrongdoing by Mokonyane, saying allegations of an improper relationship between her and LTE bosses “are false, malicious, speculative and calculated to discredit and damage her good name”.

The department said her sudden halting of procurement was prompted by the need to incorporate transformation objectives ensuring that black people, women, the disabled and poor communities benefited.

It added that both parties agreed to amend procurement policies to address transformation that would benefit black emerging companies in both countries. The office would not comment on Dlamini’s axing as this was before the Public Protector.

THE ALLEGED CAPTURE
On December 1 2015, Mokonyane wrote to her counterpart Mokose, informing him that she was removing Dlamini from the project and that communication with her “has to cease with immediate effect”. Mokonyane gave no reasons for doing so.

On the same day, she wrote another letter, notifying Mokose that Nkosi, who was acting CEO of the Gauteng Gambling Board at the time, would replace Dlamini.

Dlamini refused to comment, but a source at the water commission said Dlamini’s woes and fallout with Mokonyane began in March last year, when the commission issued prequalification tenders for the design of the dam and tunnel.

The source, a senior administrator, said director-general Diedricks wrote to Dlamini, instructing her not to proceed with the tenders.

The letter read: “You are hereby advised that the RSA government is concerned about the proceeding of the tender adjudication procedures until such time as RSA has had an opportunity to engage with the government of Lesotho on this matter. It would therefore be appreciated if the bid documents received remain sealed and in safe custody until the two countries have had an opportunity to discuss and agree on how to proceed with the tender adjudication process.”

This was followed by visits to Lesotho by Mokonyane in August and October to meet with Mokose. On both visits, she stressed the need for South Africans and Basotho to benefit from the project.

MINISTER WANTS TO BE CLOSER
According to a Lesotho official, in the August meeting with the Lesotho Highlands Development Authority (LHDA) and Mokose, Mokonyane said she felt that the South African government was “too far” from the project.

“She said she sees things happening and reads the newspapers. You could see that she wanted something and that Dlamini was a stumbling block,” he said.

Minutes of her October visit show Mokonyane proposed that two “senior politicians” from both countries be appointed to the LHDA board as representatives. The department claims both ministers (Mokonyane and her Lesotho counterpart) agreed at the meeting that transformation objectives were not reached.
An executive at the water commission told City Press that LTE boss Majola paid the delegates from both visits at different times, trying to convince them to give his company tenders.

On these visits, Majola was instructed to identify companies in Lesotho, as well as global companies, that he could form joint ventures with – and [that he should] present solid proposals and bids as the criteria were stringent,” said the executive.

Another senior executive at the commission told City Press that a senior politician in Lesotho later facilitated a meeting between LTE and Putsoane. “Majola visited Putsoane on his own, and asked him for tenders. Putsoane gave him a list of all upcoming tenders and told him to submit his bid. Majola said he was not interested in submitting a bid and that he would approach Mokonyane. So when the initial rejection from the water affairs department in Pretoria arrived [of the prequalification of bids for the design of the dam and tunnel], Putsoane was not surprised. He was expecting it,” he said.

LTE did not respond to City Press’ inquiries.
The senior official said following Diedricks’ instruction to Dlamini to stop the procurement process, Mokonyane’s department rejected the companies which the LHDA had initially shortlisted. They were instructed to re-advertise. “During the first round of the tenders, LTE did not tender. The second time they were there, but they presented a very poor tender,” the official said.

Another senior official at the commission, who was present when LTE’s bid was evaluated, confirmed it was poor.

“They had two engineers in a project that requires between 10 and 15 highly qualified engineers with experience in dam design and construction. Those two cannot even build a farm dam and think that they can build a 165m dam. What a joke.”

The official said there were little changes to the companies that had been prequalified during the first round. “About 95% were the same companies that had been prequalified during the first round.”

 

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