Abuse of water infrastructure funding delays equality

“It is clear that tax money is abused in the capital projects space because billions of rand are wasted, whilst human rights are violated due to the lack of access to sufficient water. One cannot help but question the leadership and lack of accountability within the department,” says Julius Kleynhans, director of water and environment at the Organisation Undoing Tax Abuse (OUTA).

“Capital projects must eradicate inequality, not be abused for self-enrichment.”

OUTA looked at two capital grants for water infrastructure administered by the department: the Regional Bulk Infrastructure Grant (RBIG) and the Water Services Infrastructure Grant (WSIG).

The report highlighted these concerns:

• The RBIG and WSIG are allocated a total of R27.275 billion over three years (2017/18 to 2019/20). Proper planning, project management and tight financial control are essential for the effective and accountable spending of such a huge amount, but these are lacking.

• One condition of RBIG funding is that only the social component of projects (infrastructure for basic domestic use) should be funded from this grant but, in practice, mega projects are being funded in their entirety. This delays basic services to those still waiting. One example is the bulk water supply to Polokwane, although Limpopo’s capital should have enough financially viable water users who should pay towards the economic component of this project (for higher than basic services, commercial or industrial services) instead of taxpayers footing the total bill.

• The Auditor-General of South Africa’s November performance audit on the department noted project delays, poor performance by contractors, lack of planning and lack of capacity within the department, municipalities, water services authorities and water services providers. OUTA asked the department for a report on complying with the AG’s recommendations but has yet to receive this.

• Millions of rand are wasted in cost overruns during construction, on contractors who can’t deliver, unqualified tender allocation and lack of project management. In the Sebokeng regional wastewater scheme, the AG found that project delays, blamed on protesters demanding work on the project, cost at least R11 million.

• Completed projects deteriorate because operating costs and maintenance aren’t planned.

• OUTA asked the department for a report on all projects completed with these grants, an explanation of how projects are selected, lists of projects under construction and in planning but the department has so far failed to provide this.

“The department should explain why the Sebokeng cost overruns and the spending on the Polokwane bulk water supply project should not be regarded as tax abuse,” says Kleynhans.

View OUTA's report here.

Afrikaans sound bite here.

English sound bite here.