Watergate: Service provider paid R81 million in advance

According to City Press reporter Sipho Masondo, a close friend of President Jacob Zuma was paid R81 million advance on a R1 billion tender by an entity of the Department of Water and Sanitation, Trans Caledon Tunnel Authority.

Masondo says an advance like that defeats the whole purpose of wanting people to bid for tenders. He adds that if an advance is going to be offered to the service provider chosen for the tender, that option should be mentioned in the tender document, which in this case was not.

Another red flag is that the plant built by this company was finished and commissioned in June 2016 but according the information we've received the company continued claiming construction costs until February 2017 when the construction was finished at least 6 months prior.

Sipho Masondo, Investigative journalist for City Press

However, spokesperson for the department’s entity, Wanda Mkutshulwa, insists the advance payment was regular. She referred to a clause in the treasury regulation which allows for a 10% upfront payment to service providers.

In the pre-appendix of the tender it was mentioned that there will be a 10% upfront payment that will be made, so it is not true that this was not mentioned in the tender document.

Wanda Mkutshulwa, spokesperson for Trans Caledon Tunnel Authority.

Mkutshulwa says the contract allows a 12 month period to do non critical work but in this case the departments through the right channels and procedures requested operations and maintenance which is separate form the initial contract.

To hear more of this interview, listen below:

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