One South African water project went from R90 million to R4 billion, but taps remain dry

The over-decade-long multi-billion-rand Giyani Water Project remains incomplete, with many residents across the area continuing to struggle to access clean water.

Giyani is a town situated in the north-eastern part of Limpopo, South Africa, with a population of around 320,000.

While Giyani has positioned itself as a budding commercial and administrative center, it continues to face many challenges, including extreme poverty, with thousands of households struggling with access to reliable and clean water.

Before the project, Giyani and its surrounding areas had an existing water distribution system, partly supplied by water from the Nsami Dam and partly by boreholes.

For the most part, residents receive water at the RDP service level, which includes access to a communal standpipe located within 200 meters of each household. 

However, the system was poorly maintained, and the service was inconsistent. 

The Giyani Water Project was initiated to replace communal standpipes with direct water connections to each home and to provide a more reliable water supply.

The Nsami Dam was found not to have sufficient water to enable it to be used as the source of water for the project

The Mopani District Municipality, in collaboration with the DWS, made a decision to source water from the Nandoni Dam to augment the water supply to the Giyani area, according to DWS DG Dr Sean Phillips in a recent Parliamentary briefing.

A ministerial directive was issued to Lepelle Northern Water (LNW) to construct the 40 km bulk supply line from Nandoni Dam to Nsami.

However, they said to achieve this, DWS funded further upgrades, including:

• Refurbishing and expanding the Giyani Water Treatment Works.
• Building bulk supply infrastructure.
• Installing local reticulation.

The project officially commenced in 2014 and aimed to provide a reliable water supply to 55 villages in and around Giyani by 2017. 

It was carried out under the leadership of Nomvula Mokonyane, the former Minister of Water and Sanitation (DWS) and current Deputy Secretary-General of the ANC.

However, it was and has been marred by controversy, delays and failures, despite ballooning scopes and costs.

Dodgy dealings

With missed deadlines, mounting allegations and ballooning budgets, in 2016, the Special Investigating Unit (SIU) was authorised to investigate allegations of corruption and maladministration.

“It is a cesspool of corruption. The challenges range from a complete disregard for supply chain rules to poor contract management, resulting in irregular expenditure,” said former Finance Minister Tito Mboweni.

In a recent update to Parliament’s Standing Committee on Public Accounts (SCOPA), the SIU had revealed several damning findings in their investigation.

LTE Consulting was initially appointed in August 2014 by LNW for the Giyani project at an amount of R90 million, for the refurbishment and repair of the Giyani water and wastewater schemes.

The LTE group of companies has made headlines by acquiring lucrative South African government tenders – all while discreetly making significant donations to both the ruling African National Congress (ANC) and the Economic Freedom Fighters (EFF), as revealed by amaBhungane. 

A month after LTE secured the R90 million contract, LNW issued LTE with another appointment letter for the Giyani project, now with a total estimated cost of R2.2 billion. 

Just one month later, in October 2014, LNW issued yet another letter to LTE, this time including another project in the mix.

The SIU noted that the appointment was through a deviation from normal procurement processes, and the later project cost increase of more than R2.1 billion was without an approved budget plan, and contrary to directives from the minister. 

Beyond the lack of budget and ministerial approval, the contract with LTE was irregular and unlawful, as the company was not registered with the Construction Industry Development Board, as required for a turnkey project.

The SIU further found that LNW paid an additional R1.9 billion to LTE, bringing the total to R4.1 billion. In 2015, another business plan for R13 Billion was signed.

The SIU “identified a corrupt relationship” between the LNW officials, the service provider, and department officials.

An independent quantity surveyor appointed by the SIU found that LTE charged more than R7 million to drill five sample boreholes and R2.5 million for water purification plants that did not work.

The full assessment found costs had been inflated by just under R900 million. 

LTE subcontracted South Zambezi and Khato Civils (Pty) Ltd to design and handle the construction, respectively.

Khato was subcontracted to build the Giyani Wastewater Treatment Works Revitalisation, part of the whole project, at a budgeted cost of R75 million.

Even though the contract price was R75 million, LNW paid Khatoa over R247 million.

However, Khato says that they abandoned the project “when the DWS and the LNW Board failed to pay the company R50 million for work completed.”

They have approached the courts and are demanding more than R300 million “for work done, closing down the site and its retention fee.”

The SIU said that the treatment works were functional for only four months, and the municipality reverted to relying on the old plant.

The SIU filed a review application in November 2018 to set aside the Giyani project contract.

The trial, SIU v LNW, LTE Consulting, Khato Civils (Pty) Ltd, South Zambezi Engineering (Pty) Ltd, the Mopane District Municipality, DWS; and the Minister of Human Settlements, Water & Sanitation was scheduled for July to August 2025, but will be rescheduled due to availability issues.

A civil case against three former LNW officials was launched in 2020. Originally valued at R1.9 billion, the claim was increased to R3.4 billion. Proceedings are paused pending an appeal on a joinder application.

The SIU successfully secured orders to freeze the pensions and assets of two former LNW officials worth millions.

These assets remain frozen pending the outcome of the damages claim before the Special Tribunal. In addition, two disciplinary referrals were submitted to LNW, while three criminal referrals were made. 

The SIU’s investigation concluded in 2022.

Promises made, promises unkept

In May 2022, former DWS Minister Senzo Mchunu promised that the Giyani project would be completed in September of that year. 

But this date came and went, and still, many households are without access to clean running water. 

For example, residents of the Siyandhani village have reported how they have been forced to buy water from tankers at exorbitant prices, or use water from a river shared with animals.

The official opposition in the province, the EFF, has slammed the project as a failure plagued by corruption, saying it “collapsed under the watchful eye of the ANC.” 

Provincial Chairperson Lawrence Mapoulo criticised the fact that, despite being launched in 2014 to serve 55 villages, “the people of Giyani are still water starved.” 

Mapoulo told NewsDay that the project’s multi-billion-rand budget had been lost to delays and mismanagement, noting that while the original aim was noble, “it was hijacked through corruption.”

He added that “LTE Consulting engineers and Khato Civils must be banned from working with the state. There are always issues of corruption wherever they work with the government.”

ActionSA MP and member of SCOPA Alan Beesley told NewsDay that “the corruption that took place at Giyani has been extreme with huge consequences for the fiscus and ultimately taxpayers.”

“Sadly, the corruption has severely impacted the Giyani community, denying them the basic right to running water,” adding that his fellow-party MPs across committees will continue to exert pressure.

DWS response

DWS spokesperson Wisane Mavasa told NewsDay that reticulation has been completed in 23 of the 24 villages that form part of Phase 1. The remaining village is expected to be connected before the end of July 2025.

Phase 2, which will cover the remaining 31 villages, is scheduled to begin in August or September of 2025.

Mavasa said that since the Giyani Water Project was revived in 2021, notable progress has been made across several components. 

The Nandoni–Nsami bulk pipeline, completed in 2023 by Lepelle Northern Water, now transfers 15 megalitres of raw water daily to the Giyani Water Treatment Works (WTW). 

In 2024, the Mopani District Municipality (MDM) completed the refurbishment of the WTW, restoring its treatment capacity to 30 megalitres per day. 

An additional upgrade to increase capacity to 40 megalitres is in the final planning phase, pending approval of the Implementation Readiness Study, expected later in 2025.

Lepelle Northern Water is also implementing the Giyani Water Services Project, which involves laying nine bulk pipelines spanning 325km to supply water to 55 villages. 

This portion of the project is over 90% complete, said Mavasa.

Meanwhile, the MDM is overseeing the Giyani 55 Villages Reticulation Project, which will connect households to the new infrastructure.