Makana Municipality faces allegations of fraud and corruption over missing R2.6m water pump

Daily Maverick

a day ago

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.