Millions wasted as Hazelmere Dam project stalled after Department’s failure to pay

Recent information has emerged that puts the blame for the incomplete Hazelmere Dam project squarely on the doorstep of the Department of Water and Sanitation (DWS).

Following the previous article in the Courier (Hazelmere Botch-Up, November 15), a project engineer who worked on the Hazelmere site, who asked not to be named, said the mega-project to double the dam’s water capacity came to a halt after the department failed to come up with about R40 million needed by Group Five, the contractors on the project, to buy specialised material to complete the work.

However, escalation costs have now snowballed the estimated cost to finish the remaining four percent of the project to over R100 million. The project has cost R526 million so far.

Responding to questions from the Courier, Group Five spokesperson Heidi Geldenhuys confirmed that Group Five terminated the contract on October 9, 2018 following months of failing to get payment from the department and moved off site in February this year.

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Geldenhuys said the contract termination had never been challenged in arbitration or court proceedings.

“Group Five had no option but to eventually terminate their contract and de-establish from site due to DWS’s ongoing failure to make payment to Group Five,” said Geldenhuys.

The contract to raise the dam wall by seven metres, stabilise the wall and build a piano key weir (PKW) system to increase the discharge capacity was awarded to Group Five and work began in July 2015.

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The project was initially budgeted at R498 million.

Group Five construction manager for the project, Paul Greyling said the design and execution had been the first of its kind in Southern Africa.

“This was the biggest PKW system built in the world and the biggest capacity ground anchors ever installed in the world,” said Greyling.

The PKW system is considered a new, cost-effective solution for spillways and has been used around the world with much success to raise existing dam structures. Consulting engineers, Ingérop South Africa (ISA) designed the PKW system and the engineer on the project received an award in France for the design.

According to Greyling the dam in its current state can take an extra three metres of water from its original level.

The original level was 86 metres while the current incomplete level sits at 89 metres.

The completed structure would have taken the water level to 93 metres, more than doubling its capacity.

Greyling firmly disputed reports that the concrete used to build the wall was of inferior quality and said top quality material and highly specialised equipment were
manufactured to deal with the scope of this project.

“The biggest hydraulic jack in the world was commissioned for this project, at a cost of R40-million,” explained Greyling, who said the best engineers in the business were involved in the project.

The task called for Australian-based company SRG to be sub-contracted to drill, install and post-tension the anchors.

So what does this mean for the Hazelmere Dam project?

Well placed sources have said that the dam water has to be kept at a certain level in order to not compromise the existing structure, which has not been completely secured.

If the dam wall is allowed to go over 89 metres the outcome could prove catastrophic and all the money spent will have been wasted.

When the Courier contacted consulting engineers Ingérop at their head office in France for comment we were advised that due to the company signing a non-disclosure agreement with DWS they were not able to discuss the project with the press.

According to the Courier’s source on the project, from February 2018 to December 2018 about R300-million worth of water has been discharged into the Mdloti River.

This was undertaken as a safety measure.

Asked to comment, Umgeni Water spokesperson Shami Harichunder said: “In terms of operating rules and safety requirements, the APP’s directive was that the level of Hazelmere Dam must not exceed 53 percent. In April 2018, the level of Hazelmere dam reached 74 percent and releases were implemented in adherence to the operating rule. The required level was reached on November 10, 2018.”

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According to a transcript of a meeting recorded by the Parliamentary Monitoring Group earlier this year, DWS is insisting on forging ahead with another plan to bring in a new contractor to complete the four percent remaining work, even though Treasury has recommended Group Five be brought back.

The new department minister, Gugile Nkwinti, said he had inherited a department that was in a mess.

At a media briefing in April, Nkwinti said poor management and prolonged corruption had put the country’s water infrastructure systems in jeopardy.

In the 2017/18 financial year the department spent 96.8 percent of its budget but only managed to achieve 52 percent of target.

In 2017, by the time the previous minister had left, irregular expenditure was recorded at R4 billion.

The department has also maxed out its R2.6 billion overdraft facility with the Reserve Bank, while apparently still owing contractors more than R1.5 billion.

DWS spokesperson Ratua Sputnik told the Courier the department is in the process of getting agreements in place to ensure the completion of the last four percent of the work on the dam. No time frames were indicated.

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