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Daily Maverick
6 days ago
- Daily Maverick
Makana Municipality faces allegations of fraud and corruption over missing R2.6m water pump
The Makana Local Municipality lost a valuable asset meant to help supply much-needed water. This week marked three years since the Makana Local Municipality in Makhanda, Eastern Cape, paid more than R2.6-million for a mysteriously missing water pump. On Thursday, 31 July, the Makana council was set to discuss efforts to find the pump, which is crucial to provide water to residents of the iconic university town. Lungile Mxube, a councillor for the Makana Citizens Front, laid a charge of fraud and corruption against the municipal manager and the mayor last week over the 'loss' of the pump and related political manoeuvring that followed. Part of his complaint was that they had failed to recoup the municipality's losses for the pump. Makhanda has two major sources that provide water to the town. One of them, a dam in Howieson's Poort, has a pump station that ideally needs three pumps, but only had two. Then, in July 2022, one of them was sent in for a service and never returned, or a new one was ordered and never supplied – nobody is quite sure what happened – despite the municipality making a payment of R2.6-million under a service level agreement with the supplier, Manco Business Enterprise in East London. The municipality's former director of infrastructural services and engineering, Asanda Gindana, was fired in November 2023 for paying for the pump that disappeared, among other things. She approached the Local Government Bargaining Council in November 2024 to argue that she had been unfairly dismissed, and the municipality was ordered to pay her R634,000 in damages. Gindana didn't testify at this hearing. She had been charged with the unlawful payment of R2.6-million to Manco Business Enterprise for the supply and installation of one of the Howieson's Poort water pumps without doing due diligence. But even during this legal action the municipality took against her, there was no evidence explaining what had ultimately happened to the pump. One of the contested points was the question of whether the payment was for goods received or a service, and whether it was a prepayment or not. Searching in vain Jay Kruuse from the Public Service Accountability Monitor said he wished there was 'concrete evidence' that could be used to find the pump. 'There were allegations that a supplier was withholding the release of a pump as they had not been paid for repairs to another pump, but whether the missing pump is one and the same remains to be established,' Kruuse said. Phone calls to Manco Business Enterprise, based in Sterling Street in East London, went unanswered and emails that had been used by its directors during the tender process bounced back. Mxube has now asked the Hawks to step in. In an affidavit explaining his opening a case against the municipal manager, Pumelelo Kate, and executive mayor Yandisa Vara for contravening the Municipal Finance Act, he writes: 'It is reported that, on or about 25 July 2022, the former director of the Infrastructure and Engineering Department allegedly and wrongfully facilitated a payment of R2.694.029.63 to a private company known as Manco Business Enterprise for the supply, installation and delivery of a water pump to the Makana Local Municipality. 'I asked the accounting officer [Kate] a question as to whether the money was paid to a private business and whether a pump was delivered, and if it was delivered, where it is stationed, so that I can do an in loco inspection to assess its condition. 'The accounting officer confirmed on record that indeed, the amount mentioned was paid and no pump was delivered and no explanation was given as to why the pump was never delivered.' Mxube said Vara, municipal officials and Manco Business Enterprise should be charged for fraud and corruption over the missing pump. 'Both the accounting officer and mayor as the political head are responsible for this unlawful, irregular, wasteful, fruitless and reckless spending which resulted in Makana Municipality having incurred an unlawful expenditure of over R3.2-million. 'This total of irregular, wasteful and fruitless expenditure payments breaks down as the amount of R2,694,029.63 that was unlawfully paid to a private business company … and an amount of R634,696.25 being the damages awarded by the Bargaining Council for the unlawful termination of the former director's employment contract,' Mxube adds in his affidavit. 'Lost control of pumps' Emeritus professor Philip Machanick said the Makana Business and Residents' Association also applied for information on the missing pump, and the other pumps used by the municipality for potable water, but never received a straight answer. He said at first the municipality just ignored the application, and the association had to threaten it with contempt of court proceedings to get answers. The municipality did not answer all its questions and still did not say where the missing pump could be, but it also became alarmingly clear, Machanick explained, that Makana was also not in full control of the other pumps in its possession and could not accurately say where they were. 'These are major assets. It is not like putting down your cellphone and forgetting where you put it. You can't just lose a thing like that,' he added. Machanick said the window for the municipality to bring civil proceedings against Manco Business Enterprise was closing because of a legal prescription allowing only three years to take steps to recover money. 'When we ask the municipality,' Machanick said, 'it claims the case is sub judice, but until today we have not seen court papers or anything like that showing that it is trying to get back the money paid for the pump.' He added that the case was with the Hawks now and said the association believed it had a strong case. The Makhanda community has been experiencing a severe water crisis for more than a decade, stemming from a combination of ageing infrastructure, financial mismanagement and drought. Residents have faced prolonged water shortages, inconsistent supply and contaminated water due to the municipality's struggles to maintain and upgrade its water systems. The Makana Local Municipality did not respond to a request for comment or questions about whether it knows where the missing pump is. DM This story first appeared in our weekly Daily Maverick 168 newspaper, which is available countrywide for R35.
News24
29-07-2025
- News24
Makhanda: The collapse of an iconic South African town
Makhanda's deteriorating municipal systems, including water supply, electricity, and road maintenance, have worsened. The municipality has faced consistent disclaimers of opinion from the Auditor General, highlighting severe financial mismanagement and unresolved corruption allegations. Once a significant economic contributor, the National Arts Festival has seen declining attendance, shows, and financial returns due to municipal neglect and infrastructure challenges. It was six days into the 51st annual National Arts Festival (NAF) in July this year, and yet there were no lights to welcome visitors entering the small city of Makhanda (formerly Grahamstown) after sunset, according to GroundUp. Only the occasional shop front cast patches of light along High Street between Rhodes University's Drostdy Arch and the landmark Anglican Cathedral. It was not a temporary power outage, but a situation that would persist for the rest of the 11-day festival. Municipal reports indicate this was mostly due to cable theft. Historically, the main thoroughfares would be filled with buskers, traders, and festival-goers, but the dark streets were now almost deserted. A decade ago the festival attracted 225 000 people to watch more than 600 theatre shows. It's now a fraction of that. (The municipality's population is about 100 000.) Usually the Makana Local Municipality makes an effort to temporarily patch up its failures over the festival period. Not this year. Financial mismanagement The municipality has received disclaimers of opinion from the Auditor General (AG) since the 2018/19 financial year. Prior to that, it had received qualified audits. A disclaimer of opinion is the worst finding the AG makes. It occurs when the municipality's finances are so mismanaged that the AG cannot provide documents to support its financial statements and therefore the AG cannot form an opinion. After a crumbling reticulation system left residents and festival visitors without water for days on end in 2016, erstwhile festival CEO Tony Lankester publicly stated that the biggest threat to the festival's continuation was not the paucity of arts funding, but the municipality itself. Under a majority ANC council for at least 25 years, the city has steadily and visibly deteriorated. (This reporter lived there in the 1990s and has visited the town at least once a year for more than 20 years.) Streets across the city are awash with potable water leaks and sewage overflows. Potholes are so prevalent that even some main streets are now little more than corrugated gravel. Water rationing and outages continue. Electricity outages are common. Municipal buildings are derelict from a lack of maintenance. The festival has now shrunk to 242 shows, according to NAF spokesperson Sascha Polkey. Polkey did not supply visitor numbers, but patrons were visibly thin on the ground this year. In 2013, the festival brought R349 million to the province (about R460 million today), including R90 million to the city's coffers (about R159 million in today's terms). Last year it brought in R132 million for the province, including R58 million for the city, according to a report by the South African Cultural Observatory. Off grid Residents have been experiencing water outages since at least 2012. Yet the municipality is still not able to ensure a continuous water supply to the whole town. This is despite supply dams being full. The lack of a continuous and reliable water supply has forced large revenue-contributing institutions to seek independent supplies. This in the context of a municipality with a collection rate of less than 60%, according to opposition councillors. Rhodes University, which has about 9 000 students at its Makhanda campus and is the single largest ratepayer, is moving to make itself independent of the municipality's erratic water supply. 'A significant challenge facing the university is the unreliable water supply from the Makana municipality,' said deputy vice-chancellor Professor Mabokang Monnapula-Mapesela at an alumni event on 3 July. 'The university is progressing plans to establish its own water treatment facility to process water from its borehole system,' she said, calling on alumni to assist in funding the initiative. The university communication office said it is also 'exploring renewable energy solutions'. Makhanda is home to three prestigious private schools. All have sought ways to provide a reliable water supply for their learners, staff and grounds. Managers at the Diocesan School for Girls and Kingswood College said most of the water they now use comes from their own borehole and harvested rainwater. Only St Andrew's College still predominantly uses municipal water, relying on its own supplies during water outages. Dry taps in the suburb of Tyantji may have contributed to 75-year-old resident Thandisizwe Nondlwana dying when his house burned down last month. Neighbours said they couldn't douse the flames as their taps were dry. Firefighters arrived too late. A senior firefighter told GroundUp, on condition he was not named, that the roads are so bad that it is difficult to get to an emergency in time. Teetering systems Makhanda uses about 18Ml (million litres) per day, municipal manager Phumelelo Kate said in May last year. The water is supplied from the Waainek Water Treatment Works (WTW) on the west side of the city, and the James Kleynhans WTW on the east. Retired water engineer Peter Sturrock estimates that the reticulation system has so many leaks that 28Ml needs to be pumped into the system per day for continuous, city-wide supply. As DA councillor Luvuyo Sizani put it: if you see the streets are wet, you know the water in that area is on; if the streets are dry, so are the taps. An upgrade to the James Kleynhans Water Treatment Works, which abstracts water from the Glen Melville Dam on the Orange/Fish scheme, was announced as the solution to the city's water troubles in 2015. It was meant to double the treatment works' capacity from 10Ml to 20Ml per day by 2017. It is yet to be completed. The costs have ballooned from an initial R160 million to more than R700 million to date, according to Makana Citizens Front councillor Phillip Machanik. Sturrock said the most it has ever supplied was 16Ml per day when three pumps were working full time. But the pumps burned out, and there is now only one operational pump at the James Kleynhans WTW. Two rising mains – a pipeline through which water is pumped uphill – are required to deliver the 20Ml per day target. A second was built as part of the upgrade. But the original, which takes water up to the Botha's Hill reservoir above the city, needs to be fixed. 'Time and money ran out before that was done,' said Sturrock. Although Amatola Water is in charge of the James Kleynhans upgrade, the municipality is supposed to exercise oversight and be responsible for operation and maintenance. The municipality reported to council that there is only one general worker at the treatment works when there are supposed to be six. Drought and maintenance failures In December, at the height of summer, the Howieson's Poort dam, supplying the west side of town, came close to running dry. The system is designed so that when this happens, the dam can be topped up from the larger Settlers Dam, which lies in a different catchment and is fed by the Kariega River. But, said Sturrock, when it was attempted, with just a few days of water left in Howieson's Poort, valves along the pipeline burst. It had not been checked. The pipe and pump had not been used or maintained for years. Disaster was averted when good rains filled Howieson's Poort again. However, the pipeline and valves have not been fixed, so the same problem would occur if there is another dry spell of three or four months without rain. Missing pump The 8Ml per day Waainek Water Treatment Works (WTW), which abstracts water from Howieson's Poort Dam, is working at full capacity. But municipal reports before council show it only has one operational pump, running day and night with no backup. Sturrock says there should be three: two pumps working on rotation, and a third for when one of the pumps needs servicing or repairs. There is a second pump, but as reported at the municipality's infrastructural development portfolio committee meeting of 10 July, it is 'on limp mode' and requires repair. A pump worth R2.7 million was ordered from Manco Business Enterprise in East London in July 2022, and paid for, but it has never been delivered. The engineering and infrastructure director Asanda Gidana was dismissed in November 2023. One of the two charges was for unlawfully facilitating its pre-payment. Gidana disputed her dismissal at the Bargaining Council, which ruled in her favour on both counts, and ordered she be paid six-months salary, amounting to R635 000, as she did not want her job back at the municipality. It appears Gidana was an innocent scapegoat, as the chief financial officer, the municipal manager and other municipal employees recommended and signed that the payment should be made. The commissioner making the award, Mandlenkosi Mini, remarked: With neither the pump nor its installation and connection delivered, nor any money recovered, Makana Citizens Front councillor and party leader Lungile Mxube laid a charge of fraud and corruption against the mayor, municipal manager, chief financial officer and council speaker at the Makhanda police station on 20 June. The municipality did not respond to questions on this and other issues.
