Sir,
1. WSSA is a water service provider company that is assisting the municipality with operations and management of water services. They are not consultants, and they are an international company of repute with skilled people that are required in the water industry. They were appointed through a formal tender process in accordance with MFMA Supply Chain Regulations and Municipal Supply Chain Management policy. The role of WSSA is to provide capacity support to the municipality during the transition of taking over the water services function from uThukela Water, Pty Ltd, and they are more effective, competent and committed to assisting the municipality. As matter of fact, their overhead costs represent only 6% of our budget, whereas uThukela overheads took up more than 20% of the operating budget. The reference made that R36-million is being used to pay WSSA for consulting fees is false and misleading – the R36-million is the total cost of running water services, which include management fees, general expenses, repairs and maintenance, rudimentary schemes, chemicals and other water services costs. As a matter of fact, the cost of using uThukela Water (money-making machine) was simply unaffordable as it exceeded our available budget year on year.
2. Sikoti is a JV partner that teamed up with WSSA at the tender stage. They are a locally-based company as the BEE partner. The choice of the JV arrangement is a private decision between two parties, and has nothing to do with the municipality. They do have offices in Dundee, equipment and facilities to complement the service provider.
3. The workers have been transferred to the municipality in accordance with the labour legislation. They are being paid by the municipality and we do not see anything wrong with this.
4. Tenders are advertised in terms of the SCM policy and consultants do not appoint any service provider. Adjudication of all tenders is done by the bid committees, who are employees of the municipality.
5. The reference to the PEC directive is confusing, as there was only a MEC directive. The directive was resolved with the MEC and all later decisions taken by the municipality are in accordance with the directive. Furthermore, the shareholders resolved that uThukela Water was to be dissolved in accordance with the MEC’s directives. 6. Your reference that the whole operation is now being controlled by two companies is false and malicious. All organs of state make use of service providers to provide expertise from time to time. Why should the municipality be deprived of bringing in competent resources to deliver services? The history of uThukela Water has shown how a company abused the parent municipality’s resources and insulted them through their actions and attitudes. You are correct in calling it a money-making machine at the expense of the tax-payer, and that is the reason why we got rid of them.
7. The company has a fixed budget to operate within, unlike uThukela, who could not substantiate their costs. There are performance management criteria that the service provider must comply with, and these will be monitored. This is unlike uThukela Water: in one case they provided invoices for R25-million and later withdrew them! The current contract is for management and technical support only. The bulk of our costs are related to operations and maintenance, which have been badly neglected. One wonders where our money went to. The many private companies from Newcastle benefited from us, and they were mainly white companies. These companies are crying for our business and we shall not discriminate. What stops us from using black companies from Dundee and not Richards Bay? Who we want to use is our prerogative, but we shall not limit ourselves to race alone like our predecessors.
8. It is apparent that the resources of uThukela Water chose not to be transferred to the municipality and leave their comfortable lives to serve the poor people of Umzinyathi. We had a fall-back plan to ensure that service delivery was not going to be hijacked, and will not collapse because of these few individuals who have not yet understood that South Africa is controlled by a minority no longer. We anticipated such actions from people who belong to the money-making machine. We have uncovered abuse of such individuals, and shall expose them in the right forum at the right time. They also belong to a political party that pretends to be righteous and moral, who had an interest in the establishment of uThukela Water and who managed and controlled together with its puppets. Did uThukela Water not make use of long-term consultants? Who questioned them? Your references allude to the fact it was a money-making machine, and yet you did nothing to stop it as the ratepayers. May we remind you that JV is a business entity, and not two separate companies that we intend to pump money into. Had you been given the correct advice in the first place, you would have known that the companies who tendered through the SCM process had to provide vast confirmations of their financial records and bank letters to qualify. This included being tax-compliant and VAT-registered. 9. How does the relative of the company influence a tender process that considers only technical capability, past performance and financial criteria? The relative does not sit on any one of the SCM committees. The relative should not be prejudiced because he works in the municipality. It seems like you are clutching at straws to dig some dirt.
10. Your veiled reference that uThukela Water was delivering services and should not have been removed is far from the truth. May I invite you to Msinga to see the abuse of funds by two individuals in uThukela Water? As a council, we discovered that water was being used a political tool against the ruling party. When the writing was on the wall of the imminent closure of the entity, the individuals abandoned their game and chose never to come back to Umzinyathi. They even attempted to sabotage water services to the poor. We shall expose them as well, and their private companies. The ratepayers did not pay for this, but the tax-payers paid for their shenanigans.
11. Why did the executive officials run away from uThukela Water when the forensic audit was about to take place? Which party did they belong to, and why were they never charged? Why did ratepayers not take a stand?
12. The provision of water is a district function. The ratepayers reside in the affluent areas and get water piped to their homes. The rural people, of whom there are more than 80% in our district, are subsidised by the government in terms of its Free Basic Policies. They are not subsidised by the ratepayers but by the tax-payers of the country. It is the cost that that all citizens have to pay for dismantling apartheid and providing services to the previously disadvantaged and rural poor. Had the apartheid government not discriminated against our people, there would have been no backlogs because the pot of gold that you refer to was much bigger in the hands of the previous regime, and was used for the minorities. It should have been shared many years ago, and you would not have to complain now.
13. We are busy with recruiting skilled staff as we gave uThukela Water staff the first option. However, no technical staff wanted to serve the black poor people and work in the municipality because of their own preferences or prejudices. We now have to take steps to mitigate such actions so that we are not hijacked as we were set up to fail. Water skills are important and we need to advertise these posts and fill these vacancies. In the meantime we will rely on WSSA to support us. The reliance on consultants is not unfamiliar in all government departments, and why should we be excluded? Did uThukela Water not rely on consultants? We have already commenced with a cost-reduction plan across the municipality in accordance with the best practices, and we do not need to be reminded how to do our work as an elected sphere of government.
14. Ratepayers make payment to the local municipalities, and not the district municipality. These are for services other than water. Since taking over from uThukela Water the municipality is saving more than two million litres of water per day in Dundee alone.
This water is now being used to serve the townships and people who did not have water. This has been done in the last six months since taking over. What has uThukela Water being doing for the past nine years?
15. Although uThukela obtained an unqualified audit for the last three years, it was not a clean audit. There are many irregularities that have come to the fore at the time of its shutting down. These are still to be investigated, and form some of the reasons why staff have been suspended. Regrettably, the unqualified audit was not linked to the performance on service delivery. Had this been the case, uThukela would not have been forced to close down. You are making a comparison that has no relevance to service delivery and performance.

Rev JM Mthethwa
Mayor – Umzinyathi District Municipality