R11.3m pay hike for Cubans despite 'bankrupt' water dept

Cape Town - Minister of Water and Sanitation Nomvula Mokonyane has given a group of controversial Cuban engineers an R11.3m pay hike amid claims the department is bankrupt.

The revelation comes as the department was allegedly R4.3bn in the red in February, leaving hundreds of contractors unpaid for at least seven months, according to City Press.

READ: Nomvula Mokonyane’s water department is bankrupt

Mokonyane revealed in a written reply to the Democratic Alliance on Thursday that the Cuban engineers employed in 2015 have reduced in number from 35 to 31, but that their total cost to the state had increased from R19.9m to R31.2m for the 2016/17 financial year.

Staggeringly, their travel costs escalated from about R582 000 to nearly R5.2m in one year. Their basic salaries also saw an increase from R10.4m to R19.1m.

“Their contracts will expire on 21 December 2017 but I have approved that their contracts should be extended up to 30 June 2018,” said Mokonyane in her reply.

“It’s a huge increase,” DA water and sanitation spokesperson Leon Basson told Fin24 on Thursday. “We are sitting with a shortfall of R300bn in the Water Department in the next three years. Minister Mokonyane is wasting money by not contributing to the South African situation that the country finds itself in with regard to the infrastructure of water and sanitation.”

Mokonyane is a staunch supporter of President Jacob Zuma and has criticised African National Congress members for seeking to recall the president from his position.

Outcry over engineers

There was an outcry in 2015 over the department’s decision to give the Cubans engineering contracts, however, Mokonyane brushed off the concerns.

READ: SA spends R35m on Cuban engineers amid criticism

According to the DA, she first told parliamentarians in 2015 that the Cubans were water specialists that South African universities could not develop. However, Basson said he showed her that this was “not true”.

“When I got that list of the engineers, we saw they were electricians, draftsman, and engineers – skills South Africa has,” he explained.

“When I brought this up in a debate in 2016 about why she had employed Cubans when their skills were not unique, she said the Cubans supported the anti-apartheid struggle and now South Africa was returning the favour.”

Basson said he has asked for Mokonyane to appear before the Portfolio Committee on Water and Sanitation to answer questions regarding the Cubans, but more importantly about concerns that the department is facing financial difficulties.

Bankruptcy claims

In a written Parliamentary response last week, Mokonyane revealed that the bank balance of the Water Trading Entity’s (WTE) current bank balance on 22 February 2017 was in debt with almost R3bn with the Reserve Bank.

The WTE is a public entity responsible for water resource management and falls under the department. It received a medium-term allocation of R6.2bn in the 2017 Budget.

According to an exclusive report in City Press on 9 April, confidential letters from Treasury to Mokonyane’s most senior executives reveal that:

• The WTE has racked up a R3.5bn overdraft. In February, City Press reported that the department was broke and couldn’t pay contractors;
• The department appears to have cooked its books to try to explain an amount of R654m that it can’t account for in its financials;
• The WTE’s negative balance could jeopardise the ability of the Trans-Caledon Tunnel Authority (TCTA) to service its Lesotho Highlands Water Project debt;
• Treasury will no longer pay the WTE’s invoices until the department settles its R3.5bn overdraft; and
• Mokonyane and her officials have plans to remove the WTE from the department and set it up as a stand-alone state-owned enterprise.

FULL STORY: Nomvula's money woes

Outstanding invoices

Basson said that Mokonyane made a presentation to Parliament in March 2017, which confirmed allegations of financial difficulties within her department. “Outstanding invoices not paid by end of February 2017 amounts to R1.467bn.

“The report stated that the available budget is sufficient to honour unpaid invoices of R474m through an internal budget reprioritisation process within the department.

“The department will also be able to pay its salaries of R238m for March and other goods and services invoices as they become due.

“This means that contractors appointed and projects in progress will not be funded and invoices not paid. This could lead to financial difficulties for contractors and legal action against the department.”