By Thapelo Molefe
A R646 million contract intended to urgently upgrade KwaZulu-Natal’s Thukela–Goedertrouw water transfer scheme has been declared constitutionally invalid and set aside by the Special Tribunal, after it was found to have been awarded in violation of public procurement laws.
The ruling by the Special Tribunal comes after the Special Investigating Unit (SIU) launched an investigation into the Department of Water and Sanitation contract, which was initially budgeted at R407 million but ballooned to R646.5 million, generating irregular expenditure and substantial losses to the State.
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The Tribunal found that AECOM SA (Pty) Ltd, the company awarded the contract, was irregularly included in the closed tender process despite not being formally invited. The bid adjudication committee had recommended against AECOM’s appointment, but the Acting Director-General, Sfiso Mkhize, proceeded with the award regardless.
“This judgment reinforces that government procurement must be fair, equitable, transparent, competitive, and cost-effective,” the SIU said in a statement on Wednesday.
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The investigation revealed that senior officials bypassed required procedures, contributing to unlawful procurement and substantial financial losses. Mkhize approved AECOM’s appointment despite clear procedural irregularities.
Meanwhile, Zandile Makhathini, then Chief Director of Supply Chain Management, circumvented the competitive bid system and submitted approval requests directly to the Acting Director-General.
Chief Financial Officer Mr Mpho Mofokeng also signed off on submissions despite being aware of the irregularities. Collectively, these officials failed to implement the necessary controls, in direct contravention of Section 45 of the Public Finance Management Act.
The Tribunal ordered AECOM to submit audited financial statements, invoices, and supporting documents within 30 days. The SIU will then determine the profits earned by AECOM, which the company must repay.
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Failure to comply could result in further proceedings before the Tribunal. AECOM has also been ordered to pay the SIU’s legal costs, including fees for two counsel.
The SIU, established under Proclamation R.28 of 2019, is empowered to investigate maladministration and irregularities, recover state losses, and refer evidence of criminal conduct to the National Prosecuting Authority (NPA).
“The ruling strengthens the principle of legality in public procurement and sends a clear message that wrongdoing by officials and service providers will not go unchecked,” the SIU said.
The Thukela–Goedertrouw scheme was a critical project aimed at ensuring water supply to the Richards Bay area.
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