28 March 2003
The South African Communist Party wish to warn Umngeni Water Board that if it continues with meeting the Monday deadline of paying the improper out of court settlement with Enterprise Risk Management (ERM), the SACP will embark on a rolling mass action to defend the public purse from abuse.
It must be mention that ERM used to be Specialised Outsourcing Limited (SOL), created by a certain Mr. Dave King who also worked as a consultant to Umngeni Water on cost effective ways to run its treasury department, when there was a web of reported mismanagement and gross over-funding of Umngeni programmes. This company, SOL got the tender without undergoing a tendering process and the feature of the contract is (alleged) that the performance bonus was constructed in such a way that SOL would be rewarded in every market circumstances. This meant that when interest rates declined, SOL would be rewarded for capital gains. This circumstance, and probably many others, led to the then Chief Executives of Umngeni and SOL, Messrs. Cromet Molepo and David Mclean mutually agreeing to terminate the contract on the 14th November 2000.
The out of court settlement that is reported to have been entered into on the 17th March 2003 is therefore very surprising and calls for much explanation. It is said that Umngeni will pay R21, 5 million to settle the matter. The SACP views such an amount with concern as this entity is charged with the responsibility of delivering water to the people, especially the working class and the poor. It is also very disturbing that circumstances that led to this settlement are not disclosed to the public. It is even worse that there are reports indicating that the full board and the executive management were not consulted about to this settlement.
The SACP finds it completely unacceptable that exactly a day after the arrest of the former ERM head, Mr. Dave King for charges relating to corruption about the same contract, Umngeni decides to settle. This makes us suspicious as to what is going on and what is being hidden! Why Umngeni realises now that it cannot proceed with settling the matter in court when they knew about the case long ago. Who is running from the truth, we wonder? We reiterate our support for NEHAWU's demand for an independent judicial inquiry into this matter. The SACP calls on other board members to distance themselves from this public loot and demonstrate that their being board members represents the interests of the public, especially the poor who will once again suffer the increase of water rates.
The SACP will table this matter at a bilateral meeting with COSATU next week with a view of getting its support for a rolling mass action if the settlement goes ahead. We will also consult the ANC about this matter.
For further details contact:
Smiso Nkwanyana
SACP Provincial Secretary
082 4687184