Explosive R75 Million Water Tender Scandal: 9 Arrested In Alfred Nzo Municipality Crackdown

As South Africa grapples with an escalating water crisis, a major corruption scandal has erupted in the Eastern Cape. The Special Investigating Unit (SIU) has confirmed the arrest of nine individuals linked to a controversial R75 million water tanker tender at the Alfred Nzo District Municipality (ANDM).

The arrests come after the SIU referred its findings to the National Prosecuting Authority (NPA), following an in-depth investigation that uncovered serious irregularities in the procurement process.

SIU Probe Uncovers Alleged Fraud in R75m Water Tanker Deal

According to SIU spokesperson Kaizer Kganyago, the accused appeared before the EmaXesibeni Magistrates’ Court facing charges of fraud, corruption, money laundering, and breaching the Municipal Finance Management Act (MFMA).

“The accused appeared before the EmaXesibeni (Mount Ayliff) Magistrates’ Court on charges of fraud, corruption, money laundering, and contravention of the Municipal Finance Management Act (MFMA),” SIU spokesperson Kaizer Kganyago said.

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The SIU’s investigation found that a contract for trucks, water tankers and jet vacuum tankers was granted to Kwane Capital (Pty) despite there being no approved municipal budget for the purchase.

“The yellow fleet refers to six trucks, six sprinkler water tankers, and three jet vacuum tankers that were meant for water supply, sanitation, and infrastructure support in the municipality.”

Each of the accused was granted bail of R10 000.

No Budget Approval and Alleged Misrepresentation

Kganyago revealed that ANDM allegedly paid R75 million to Kwane Capital in violation of Regulation 32 of the Municipal Supply Chain Management Regulations.

“The SIU investigation revealed that the ANDM paid R75 million to Kwane Capital for trucks, water tankers, and jet vacuum tankers without budget approval and in contravention of Regulation 32 of the Municipal Supply Chain Management Regulations.”

The investigation further alleges that Kwane Capital falsely claimed ownership of the vehicles and improperly used the name of Avis Fleet to secure the deal.

“Kwane Capital misrepresented ownership of the vehicles, unlawfully used the name of Avis Fleet and induced the municipality into contracts that were invalid and unlawful.

“Fraudulent licensing and vehicle examination were also uncovered, with roadworthy certificates issued despite GPS data showing the vehicles never attended testing stations.”

Hawks and SIU Move to Recover R60.7 Million Loss

The SIU estimates the municipality’s actual or potential financial loss at R60.7 million, citing inflated pricing and excessive profit margins.

“The municipality suffered an actual or potential financial loss of R60.7 million due to overcharging and excessive profit margins. The SIU has instituted a civil action in the Special Tribunal to review and set aside the contract and to recover losses suffered by the municipality,” he said.

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The arrests were carried out by the Hawks’ Serious Corruption Investigation (SCI) and Serious Commercial Crime Investigation (SCCI) units, working alongside other law enforcement authorities. The suspects, aged between 43 and 73, include two corporate entities and were apprehended in different locations, including areas outside the Eastern Cape.

As communities continue to endure water shortages, the case is likely to intensify scrutiny on municipal spending and accountability in service delivery projects.