Durban - The board of KZN’s Umgeni Water has been dismissed by Human Settlements, Water and Sanitation Minister Lindiwe Sisulu.
Yesterday, Sisulu announced the appointment of an 11-member interim board pending the finalisation of the full-time appointments.
Sources close to Umgeni Water claimed the axed board had operated optimally in its duties overseeing the running of the utility.
Umgeni Water is the second-largest water board in the country, with an annual turnover of more than R2.4bn and a capital expenditure budget of more than R7bn.
It has consistently achieved excellent financial and non-financial performance, with clean audit reports annually from the Office of the Auditor-General.
“We are confident that the interim board will conduct its business to oversee Umgeni Water in the best interests of its clients, especially with regard to sound governance and stability of the utility,” Sisulu said in a statement.
The utility’s performance will be overseen by committees of the board and an independently chaired ethics committee, with regular stakeholder engagements to assess compliance with contractual obligations.
Her spokesperson, Yonela Diko, declined to provide the names of the interim members at this stage.
The axed board members were served letters on Monday, informing them of the termination of their appointments. In the letter, Sisulu apologised “for the incorrect process that was followed when you were appointed as an ordinary member of the board of Umgeni Water”.
“You will be aware that all appointments of the boards have to be approved by the Cabinet, which did not happen in this case. In order to regularise the process, I have decided to appoint an interim board to ensure that proper processes are followed in appointing a permanent board.”
One of the sources who spoke to The Mercury questioned the reason given for the dismissals, saying that the National Water Services Act allowed for the minister to appoint board members.
“Saying that the reason was that it didn’t go through the Cabinet... I don’t think is a legitimate reason because nowhere in the act does it say that it has to go to the Cabinet,” he said.
“Also, the new interim board was appointed yesterday, which means from Friday, nobody is in charge. I understand they are running around trying to put together a list of board members, but it is clear that there should be a nomination process. The act says that you should consult. They should have been consulting with municipalities, the premier, investors and stakeholders. Who did the investors nominate?”
He said the move had nothing to do with water, but rather with infrastructure projects.
Another source said the dismissals had “taken everybody by surprise” and nobody knew who the interim members were.
He said the move was “highly unprofessional” as Sisulu could have rectified any administrative oversight by taking the current appointments to the Cabinet for approval. He said the utility had an “impressive record and is a state utility which is functioning correctly and has a good relationship with shareholders and bond holders listed on the JSE”.
“If she is saying the board is illegal, she has been the minister for about a year now and has realised today that the board is illegal. It has implications for decisions that have been taken by this board which include decisions she has signed, the annual financial statements, the appointment of the chief executive, and the social compact.
“Sisulu has approved all of that while this so-called illegitimate board has made these recommendations. It’s not the fault of the board. If they made an error on their part, it doesn’t warrant the removal of the whole board to create instability and uncertainty in the current market,” he said.
“We are in the middle of a pandemic and the minister is behaving as if there is nothing of the sort. One of the key criticisms her department has been getting is the provision of water. To suddenly come in and say we are removing the board and putting in an interim board creates an atmosphere of tension,” he said.
Sisulu placed the Amatola Water Board in the Eastern Cape and Lepelle Northern Water in Limpopo under administration earlier this year.
The Special Investigations Unit is investigating both utilities.
The Mercury