The Cooperative Governance and Traditional Affairs (Cogta) MEC Sipho Hlomuka has called for greater transparency and dialogue between the uThukela Water Board and its shareholders which are the Districts of Mzinyathi, Amajuba and the Newcastle Local Municipality.
Uthukela Water Board as an entity supplies bulk potable water to the three Water Service Authorities of Newcastle, Amajuba and uMzinyathi.
MEC Hlomuka met with the Water Board and representatives of its shareholders today.
During the meeting, the entity made a presentation on its current financial state which is quite dire as it is owed R 243 million by the municipalities that it supplies with water and has a backlog of infrastructure to the tune of R700 million.
In his address to the management of the entity and shareholder representatives, MEC Hlomuka expressed his concern at the deteriorating financial situation of the entity which was found to have serious governance breaches and failures by a section 106 forensic investigation that was done by the department and handed over to the shareholder for implementation of its recommendations.
“We are concerned with allegations of nepotism and the failure to follow all proper processes as outline in the Municipal Finance Management Act. These governance failures are compromising the entity and we want you as shareholders and management to deal with these allegations that were set out in the forensic report” said Hlomuka.
The entity also faced allegations of racism which were investigated by the department and sustained but the entity has failed to act against the perpetrators.
The MEC has directed the shareholders of the entity to strengthen their oversight and implement measures that will hold to account the management of the entity and those that have since resigned but had committed criminal acts.
Should the shareholders fail to exercise proper oversight the viability of the entity could come into question.
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