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City Press reported yesterday that water and sanitation minister Nomvula Mokonyane’s young male companion has been calling the shots in her department, going as far as giving orders to her director-general.
Senior department of water and sanitation officials and contractors confirmed how Luvo Makasi, who turns 33 next week, has been attending senior management meetings, “arrogantly” dishing out instructions, and “ordering us around”.
City Press sent department spokesperson Sputnik Ratau a list of 22 questions about the relationship between Mokonyane and Makasi, their alleged travels together, his approach to her about cooperating with the Central Energy Fund of which he is chairperson, his attendance of meetings with her senior officials, and the potential damage the relationship poses to her reputation.
READ: Nomvula’s ‘Ben 10’ calls the shots
Ratau chose to respond to three of them, as follows:
1. The minister knows Makasi and has a political and professional relationship with him.
2. Makasi is not an employee of the department and as such has no role nor authority in departmental matters or those of entities under the department.
3. The minister is the executive authority of the department and continues to personally exercise all her responsibilities in line with the Constitution.
Regarding the almost R1 billion SAP contract which the department entered into despite advice to the contrary from the department’s own chief information officer, its legal advisor and the State Information Technology Agency (Sita), City Press asked a further 15 questions.
Here are the questions and Ratau’s responses to them:
QUESTION 1: Documents received by City Press reveal that on July 13 last year a legal officer by the name of Puseletso Loselo had given a legal opinion that the contract was flawed and should therefore not be signed. Why did the department sign the contract?
ANSWER: The original process of the acquisition of SAP was approved by the executive authority and was duly finalized by the Accounting Officer as delegated by the PFMA. This approval was preceded by the ICT committee considerations and Bid Adjudication Committee recommendations.
QUESTION 2: Another document reveals that on July 19 last year Sita warned that all IT infrastructure should be procured via the agency. But it doesn’t look like the department heeded the notice. Why did the department not procure the SAP via Sita?
ANSWER: The emailed letter from the Sita group CEO was received after the approval for the process was granted. Further to that, the letter does not reflect that all IT infrastructure must be procured through Sita but indicates that Sita need to determine if the SAP procurement falls within the Sita mandate. Further take note of paragraph 2, 3 and 4 of the letter. Further note the date of the contents referred to in paragraph 1 of the letter- it shows the inconsistency in the sequence of events.
QUESTION 3: Minutes of a meeting held on July 21, 2016 reveal that due diligence on the contract had not been done. Why did the department enter into a contract when due diligence had not been done?
ANSWER: The notes from the Bid Adjudication Committee said the ICT committee must be consulted and this was duly complied with as per the directive of the said committee. This was in compliance with our internal processes prior to the Accounting Officer’s approval.
QUESTION 4: The department procured SAP for all the water boards, including the Trans Caledon Tunnel Authority. Did the department consult with these entities to make sure that they actually needed SAP?
ANSWER: The SAP contract will allow for the department of water and sanitation to continue to successfully execute its operations across various functions and further expand aggressive growth across the department of waster and sanitation, water boards and other subsidiaries. Through the consumption and deployment of the solutions included in the new SAP contract, the department of water and sanitation will be able to execute its newly defined strategies up to and including 2021.
QUESTION 5: The Department has a contract with SAP already. Why does the department need this new SAP?
ANSWER: Refer to no 4 above
QUESTION 6: How is this new SAP different from the one that the department currently has?
ANSWER: Refer to no 4 above
QUESTION 7: Please explain in detail why the department and the water boards need the SAP contract.
ANSWER: It allows the department to manage the funding on infrastructure projects and the entire source-to-tap network on a single platform; hence its extension to its subsidiaries and water boards. Information requirement of the department must be met across the demand and supply of the water resource and need to be managed in real-time. SAP technology provides such critical core business requirements and through leveraging economies of scale we are able to drive out this strategic programme.
QUESTION 8: According to email obtained by City Press, the contract will cost in excess of R950 million. Does the department have funds for such “vanity” projects?
ANSWER: The leaked document clearly shows the contract value of around R450m, further note the cost benefit analysis done prior to the approval shows an estimated savings of more than R500 million.
QUESTION 9: City Press has reliably learned that in December SAP was paid R285 million for the contract. Can you confirm this?
ANSWER: As per Treasury Regulations all valid and accurate invoices must be paid within 30 days to all suppliers.
QUESTION 10: What exactly was the payment for?
ANSWER: All payments of the department are for services rendered or goods purchased in line with the respective contract.
QUESTION 11: Recently a whistle blower wrote an elaborate letter, detailing corrupt activities in the department. One case involves Luvo Makasi having conversations with the managing director of SAP in South Africa, discussing the SAP contract. Has the department seen the whistle-blower’s letter? Is the department not concerned about this allegation?
ANSWER: The department has an anti-corruption hotline to which all activities can be anonymously reported. The department also has an obligation to investigate and report to the Audit Committee and the Public Service Commission. The Public Protector Act also provides further protection to all whistle blowers in terms of the said Act. The department of water and sanitation's accounting officer has not been copied in this alleged letter or correspondence.
QUESTION 12: Is the department investigating such a serious allegation?
ANSWER: Refer to no 11
QUESTION 13: The whistle blower claims a R35 million kickback was received from the SAP contract. Is the department investigating this allegation?
ANSWER: Refer to 11
QUESTION 14: City Press has learned that then-DG Sifiso Mkshize didn’t want to sign the SAP contract. He then left for China. Can you confirm this?
ANSWER: In line with the cost containment measures of National Treasury, all official international travels are considered and duly approved by the Executive Authority especially when they add value to the department's services, as such the then Acting DG’s trip was in line with these prescripts.
QUESTION 15 City Press can also confirm that the CEO of the Water Trading Entity signed the SAP contract with a disclaimer that he “had reservations with the contract, there was no money to fund it, and that it was flawed.” But the department went ahead and approved the contract. Why?
ANSWER: The WTE does not have a CEO. The delegated official duly approved the contract as per the PFMA and Departmental processes.
