Six years on, still no charges after R270m water corruption probe

Share current article via EmailShare current article via FacebookShare current article via TwitterShare current article via LinkedInSipho MasondoEnter fullscreen mode displaying this image.ExpandAn SIU investigation into uMngeni-uThukela Water found R270m in alleged kickbacks and money laundering. Yet six years later, a senior official alleged to be behind the scheme, Nishal Harribarran, is still working at the water utility. File photo. Story audio is generated using AI

A senior uMngeni-uThukela Water official — whom the Special Investigating Unit (SIU) alleges was involved in a R270m scheme of kickbacks and money laundering — is still on the utility’s payroll, six years after he was referred for prosecution by the SIU in 2020.

The Sunday Times can reveal that Nishal Harribarran, an asset manager at uMngeni-uThukela Water, and 60 others referred alongside him have never been charged.

This week, the National Prosecuting Authority (NPA) told the Sunday Times that a docket had been registered regarding these cases. Hawks spokesperson Col Katlego Mogale said an investigation into the alleged corruption at the water board was under way.

“It is alleged that [uMngeni] officials deliberately manipulated the entire procurement process to gain financial benefit for themselves.” — Special Investigating Unit report.

A source with knowledge of the matter said Harribarran had also never faced an internal disciplinary hearing, as recommended by the SIU in 2022. Responding on behalf of Harribarran and his father, Rooplal Harribarran, who has also been implicated, lawyer Evashan Pillay said his clients had not been arrested and that no court had made any finding of criminal wrongdoing.

Calling itself the largest bulk potable water supplier in KwaZulu-Natal, uMngeni-uThukela Water did not respond to questions from the Sunday Times that were sent nine days ago.

The details of how, according to the SIU, Harribarran helped steer contracts to a network of companies and middlemen, with money flowing back to him, are contained in the unit’s final report to President Cyril Ramaphosa, dated June 2023.

The report states that in April 2014, the Ugu municipality approached uMngeni Water (now uMngeni-uThukela Water) to carry out urgent replacement of ageing pipelines. The R26.4m project was split across three contracts, a procurement process that the SIU alleges was manipulated to bypass an open tender.

According to the report, Govender was brought in by the district municipality’s manager to help steer the procurement process for the project. One of the contracts was earmarked for Madakeni Water Solutions, owned by Ian Buitendach, with Govender allegedly arranging with Harribarran for the company to get a R5.7m contract. Buitendach later told the SIU that his quote for the job was actually R3.3m.

SIU investigators found that Govender, while assisting Buitendach with the project’s quotation and costing, allegedly padded the price with an extra R2m for Harribarran. The SIU report says the amount constituted an alleged kickback, noting that Harribarran was allegedly handed a “once-off cash payment”. Contacted by the Sunday Times, Buitendach’s lawyer, Justin Forster, said his client would need to see the SIU’s report before responding. Govender declined to comment on the allegations but claimed he was responsible for blowing the whistle to the SIU.

The SIU uncovered a R5.19m money trail involving two entities that allegedly had no contract with the water board. The two entities received R3.4m and R1.7m from a contractor appointed by uMngeni Water, with their directors alleging to investigators that the money was meant for Harribarran. The report details how the water company paid Klomac Engineering R84.2m for repairs to three shaft pumps after a fire at its Durban Heights Water Treatment Works, a project that the parastatal’s own officials had initially estimated would cost R11m. Klomac also allegedly paid R5.19m out of its uMngeni contract to the same two entities, whose directors told the SIU that the funds were for Harribarran.

The SIU found that instead of putting the work out to tender, in January 2016 officials allegedly loaded it onto Klomac Engineering through a variation order, piggybacking on the company’s existing contract to upgrade chlorine systems at the Durban Heights facility.

According to the report, the utility’s officials estimated that repairing the fire-damaged pumps would cost R11m. Yet the variation order awarded to Klomac Engineering was worth R66.4m, or R75.7m with VAT. Yet the utility paid Klomac Engineering R84.2m.

“It is alleged that [uMngeni] officials deliberately manipulated the entire procurement process to gain financial benefit for themselves,” says the report. The SIU’s quantity surveyors found that uMngeni ultimately blew R132m on excessive costs for the shaft-pump repairs and chlorine-system upgrades.

Responding on behalf of Colin Paton, Klomac Engineering’s director, lawyer Yahya Hassan said his client had co-operated fully with the SIU investigation. “Neither Mr Paton, nor Klomac Engineering, nor any other officials of Klomac Engineering have been charged by the NPA, as there has been no wrongdoing on their part,” he said.

The SIU allegedly traced R966,034 from a contract to supply control valves to uMngeni Water through a chain of intermediary companies to Sunmac Trading. Investigators allege that Harribarran ultimately benefited from money received by Sunmac. Harribarran, the SIU found, also lives in a house bought by his father in Westville, Durban.

The SIU alleges that Harribarran, Bucebo General Trading director Priscilla Mhlongo and former Telegenix 799 director Dayanund Pakraj manipulated a programme meant to advance black contractors. Investigators said they abused the Contract Participation Goal (CPG) programme “through fraudulent methods for the purpose of illicit financial gain”.

In December 2014, officials resolved to award a R55.9m contract to Mitech Control Valves to supply specialised valves. Bucebo was brought in as a CPG partner and subcontracted to assemble and test all the valves supplied by Mitech in return for 30% of the value of the contract.

According to the report, Bucebo ”did not perform any work related to the terms set out in the contract”.

“When Mrs Mhlongo was interviewed, she did not know what a control valve was or what the nature of the contract entailed … Bucebo did not have the set of skills required for such specialised work … Bucebo was brought in solely for the purposes of manipulating the CPG programme for the purposes of illicit financial gain,” the report states.

Investigators found that Bucebo passed the work to Telegenix and paid it 75% of its share of the contract, despite investigators finding that Telegenix had allegedly done no work.

Ultimately, uMngeni paid Mitech R55.9m to supply the valves, of which Mitech channelled R15.3m to Bucebo. Bucebo paid R10.2m to Telegenix, which allegedly paid R1.5m into the personal account of Mitech’s chief executive, the late Lambertus Alberts. Telegenix also paid Sunmac Trading R966,034.

Mhlongo’s lawyer, Robinson Manzi, said her client had been interviewed by the Hawks and gave them her “full explanation”. Bucebo did the work, he said, adding that Mhlongo was never involved in any nefarious or corrupt dealings.

Pakraj’s lawyer, Ryan Dukhi, said his client did not contract directly with the water utility and denied any wrongdoing. Mitech’s director, Anna-Marie Alberts, did not respond to requests for comment.

In yet another contract, the SIU found that Harribarran and a colleague allegedly bypassed tender processes for a R48.9m filter-replacement project at a water treatment plant in Durban.

Govender and Robert Neill, whom the report described as an agent for the company that won the contract, allegedly supplied the names of the four bidders invited to compete for the project and calculated the prices for all of them in what investigators described as “cover quoting and inflation of prices”.

The company appointed, Eddy Current Testing SA, trading as Cornet and Kingsbergen, had Neill’s son, Gareth, as one of its directors. The contract ultimately ballooned from R48.9m to R124.5m after three variation orders were approved.

Neill’s lawyer, Helena Badenhorst, said: “Our client denies any allegations of wrongdoing in the strongest possible terms. In particular, the report on which your allegations are said to be based has never been given to our client …”

Lastly, the report accuses Harribarran of circumventing procurement processes in the appointment of Agri Industrial Services to drill boreholes in uMkhanyakude District Municipality.

Investigators found that after he and two colleagues motivated Agri Industrial Services to be appointed without a tender, Harribarran allegedly instructed its sole member, Thiloshini Naidoo, to subcontract the work to four entities, some of which were owned by his acquaintances. Naidoo did not respond to requests for comment, despite promising to do so.

The original contract was worth R33m, but the water board ultimately blew about R51.5m on the project, with the SIU estimating R40.9m in wasteful and irregular expenditure.

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