KwaZulu-Natal water utility Umngeni-uThukela's irregular expenditure has ballooned to a whopping R2.5-billion, as the Special Investigations Unit (SIU) probes two contracts largely responsible for the fiscal faux pas. 

The SIU began investigating the water utility when it was called Umgeni Water, and is probing numerous allegations, ranging from appropriating the board's funds to corruption and offences relating to the Prevention and Combating of Corrupt Activities Act.

It has since merged into Umngeni-uThukela with the embattled Umhlathuze Water merging with Umgeni Water.

Irregularities persisting

On Thursday, while delivering the annual report for Umngeni-uThukela, board chairperson advocate Vusi Khuzwayo SC said the board met with the SIU last week and "touched on what would be a prudent approach in the investigation" pertaining to the two irregular contracts.

"The longer the investigation runs, the longer the irregularities will sit in our Auditor-General report, and they don't read well."

Presently, the cumulative irregular expenditure for 2022/2023 for the water board amounted to R2.5-billion.

This includes an amount of R1.9-billion that was carried forward from the previous years.

The total amount incurred in 2022/2023 amounted to R567-million.

The entity also saw deviations from supply chain management processes amounting to R100-million for the year.

Khuzwayo said the board couldn't attempt to do anything in terms of the two contracts "because they are in the hands of the SIU".

"We are having a follow up with the Hawks and SIU tomorrow because the Hawks are also investigating those two contracts."

Khuzwayo denounced the state of the contracts.

"There are irregularities investigated and the contracts are still ongoing, so someone is benefitting from an irregular contract," he said.

He added that the water board was however "bound by such a contract unless it has been set aside".

"We posed to the SIU the possibility of engaging with their processes and going through some of these issues through their presentations.

"When the contracts are set aside, we are in a different light. The contracts can only be cancelled once a determination has been made."

Khuzwayo said the investigation spoke to allegations and that "the longer [the investigation] takes, the worse it comes to our reports".

In January, while delivering the 2021/22 annual report, chief financial officer Thami Mkhwanazi vowed all new irregular expenditure would be investigated by then Umgeni Water's internal audit committee.

At the time, while Mkhwanazi revealed the high level of irregular expenditure that the SIU was investigating, he would not be drawn into providing information on companies and contracts involved in the billions of irregular expenditure, citing legal processes.

Seven of the 75 tenders audited in the 2022 financial year were found to be irregular, he revealed at the time.

KZN, like other provinces, is plagued with water and infrastructure issues at a municipal level.

Residents often experience unplanned water outages for days at a time.