Millions lost in water tender: Prevention must be strengthened in water procurement - WaterCAN

WaterCAN says the problems surrounding Johannesburg Water’s Randburg depot contract demonstrate why South Africa needs to fundamentally rethink how high-value water and sanitation contracts are scrutinised before public money is committed.

Reports that Johannesburg Water is seeking to recover about R30 million paid to the original contractor, while National Treasury has reportedly been approached to restrict the company and its directors from future state business, show the limitations of dealing with procurement failures only after projects have stalled and money has already been spent.

WaterCAN executive director Dr Ferrial Adam said the country needed to become much better at preventing procurement failures rather than repeatedly trying to recover money afterwards.

“It is not enough to chase the corruption after it has happened. We need to get better at the prevention of corruption,” Adam said.

While WaterCAN supports efforts to recover public money and to hold companies and individuals accountable where wrongdoing or contractual breaches are established, Adam said full recovery is often not possible and can take years to achieve, if it occurs at all.

“We want to know who was involved in the procurement, who signed off on these agreements, who was on the procurement committee and who did the checks. Those people must still be held answerable even if the contract was awarded in 2022.”

Adam said the Randburg case raises important questions about the controls that existed when the original contract was awarded and whether warning signs could have been identified before millions of rand had been paid.

The Randburg depot contract was awarded in September 2022, with delivery expected within 12 months. It is still not completed. A new contractor was appointed in 2025.

“Failed contracts like these have real-world consequences, with communities, particularly the most vulnerable, being impacted the most. This is a matter of principle.”

The Randburg depot development was expected to support Johannesburg Water’s service delivery mandate and improve the operations department’s capacity to attend to water pipe bursts, sewer spillages and general infrastructure maintenance.

WaterCAN believes high-value water and sanitation procurement requires considerably stronger safeguards.

“These should include full declarations of interest by officials and bidders before procurement begins, transparent evaluation and adjudication processes, independent legal scrutiny of major contracts and independent audit oversight before an appointment is finalised,” Adam said.

“And more importantly, this information must be made public. When we speak about co-governance, this is where it needs to become real. Civil society should have a formal role in monitoring major tenders from the point they are advertised through to adjudication, with access to the information needed to scrutinise who is bidding, who is making the decisions, what criteria are being applied and why a contract is awarded.”

Adam said this is not about civil society taking over procurement. It is about putting another set of eyes on public money before it disappears.

“We cannot continue to discover corruption, inflated contracts and conflicts of interest after the money has already been spent. Civil society must be able to monitor, question and flag concerns before contracts are signed. Otherwise, we are simply pouring public money into corrupt holes and then asking citizens to pay more when the system fails.”

For particularly high-value or strategically important infrastructure contracts, WaterCAN believes consideration should also be given to a formal oversight role for bodies such as the Auditor-General or the Special Investigating Unit (SIU) before implementation.

Adam said the work of the SIU’s Water Sector Anti-Corruption Forum’s Prevention Subcommittee would play a vital role in identifying and tackling corruption at the procurement stage.

Independent scrutiny could help identify irregular specifications, conflicts of interest, inadequate due diligence or procurement requirements that appear designed around a particular bidder before an award is made.

This need to move from reacting to corruption to preventing it is also one of the reasons WaterCAN is working with the Special Investigating Unit (SIU), the Department of Water and Sanitation (DWS), the business sector, civil society and other stakeholders to strengthen the prevention of corruption in the water sector.

WaterCAN calls on Johannesburg Water and the City of Johannesburg to disclose the governance trail surrounding the original Randburg depot contract, including:

• who served on the relevant bid specification, evaluation and adjudication structures;

• who ultimately approved the award;

• what financial, technical and legal due diligence was conducted on the successful bidder;

• whether declarations of interest were submitted and independently checked;

• what monitoring took place as delays and performance problems emerged; and

• what accountability measures are being considered against officials or other parties if failures in the procurement or contract-management process are identified.

The Auditor-General should also examine whether the procurement and subsequent management of the contract complied with the required financial and procurement controls. We should not need to submit a Promotion of Access to Information Act (PAIA) request to access this information.