Water infrastructure upgrades in rural Limpopo villages are caught up in a sea of irregularities with costs soaring from R90-million to R4.1-billion – all paid for by municipal authorities.

On Tuesday, the Special Investigating Unit (SIU) briefed the Standing Committee on Public Accounts (Scopa) on the irregularities in the project.

SIU lead investigator Gina Beretta-Pretorius told the committee the Lepelle Northern Water (LNW) irregularly contracted LTE Consulting Services.

"On 14 August 2014 Mr Thulani Majola from LTE attended the imbizo called by former minister of water and sanitation [Nomvula Mokonyane] to address the water challenges in Giyani. During the hearing held at the SIU offices, Mr Thulani Majola confirmed that he was present at the imbizo held in Giyani on 14 August 2014.

"He further mentioned that after the imbizo was concluded, he met with the CEO of LNW, Mr [Phineas] Legodi and proposed ideas that can resolve water challenges in Giyani through his company, LTE," she said.

The following day, LTE representatives were present at the task team meeting called by Mokonyane even though the task team was supposed to be attended by officials from Mopani District Municipality, the Department of Water and Sanitation (DWS) and LNW.

Representatives from LTE were present at the task team meetings before LNW started with the supply chain management process to appoint a service provider for the project.

"LTE was initially appointed on an emergency basis on 20 August 2014 for the repair and refurbishment of the water and waste-water works for the value of R90 150 000.00.

"The appointment dated 20 August 2014 was informed by a directive issued by the minister on 25 August 2014, requesting LNW to intervene on emergency [projects] with regards to the water challenges in Giyani.

"The minister indicated that Giyani Water Treatment Works should be completed by no later than 30 September 2014," Beretta-Pretorius said.

Then on 25 September 2014, LNW appointed LTE for non-emergency works to the value of R2.2-billion excluding tax.

"It should be noted that no procurement processes were followed when the project was extended from R90 150 000.00 to R2.2-billion.

"It must further be noted that the directive issued by the minister on 25 August 2014 was not extended to include non-emergency projects.

"LNW thus extended the project to include non-emergency works, increasing the amount from R90 150 000.00 to R2.2-billion, without authorisation from the DWS as there was no extension to the directive issued on 25 August 2014," Beretta-Pretorius said.

The SIU’s investigation has also uncovered that the LNW has paid an amount of approximately R4.1-billion to the service provider, which far exceeds the original contract value of R2.2-billion.

"The SIU is of the view that if a new directive was issued to include the non–emergency works, LNW would have been required to go out on a competitive bid.

"There was a reason to believe that the award was made to LTE without any competitive bidding or supply chain management process having been followed; and LTE is a professional services engineering firm, which rendered consultancy services to its clients and did not have the capacity or experience to execute or manage a 'turnkey project'," she said.

Deputy Water and Sanitation Minister David Mahlobo said there were plans to augment the treatment plants connected to the Giyani project.

"There is no problem with water. The water is there and it has arrived, but there is an issue of expanding the plant. The implementing agent remains LNW, but it is our engineers. They will increase the capacity to 40 megalitres, and in a period we will have more capacity to serve more communities," he said.

Meanwhile, the SIU told Scopa that it had successfully frozen the pension fund of two senior officials from LNW who were at the centre of irregular water upgrade tenders.

Beretta-Pretorius told Scopa that the SIU had successfully submitted court applications to the Special Tribunal to preserve Legodi's pension of R2 463 341 and four immovable properties had been frozen, while former general manager of operations Carel Schmahl has had his pension, valued at R10-million, frozen.

"The above will remain frozen, pending the outcome of the damages claim against the former officials in the Special Tribunal," Beretta-Pretorius said.

Additionally, Legodi and the former LNW board applied for an interdict against the SIU to prevent it from conducting further investigations.

They argued the purported investigation by the SIU of the private/personal financial affairs of Legodi was not authorised by the proclamation.

The former LNW board withdrew as a party to the proceedings, and Legodi later abandoned the process.

The case is considered closed.