How to waste R155m on Zuma's Nkandla homestead

The Special Investigating Unit claim states that the Nkandla upgrades cost almost 10 times what they should have.

By the time the upgrades to Nkandla were essentially finished, the project had grown vast – and vastly complicated. But this week the Special Investigating Unit (SIU) put a very simple proposition before the high court in Pietermaritzburg.

The entire project, the SIU said, should have cost only R28-million in total. With President Jacob Zuma’s personal architect Minenhle Makhanya in charge, it ended up costing nearly 10 times that much. Makhanya himself was paid just over R17-million. Now the SIU wants a “just and equitable” reckoning: R155‑million in repayments to the state, taken out of Makhanya’s hide.

The SIU’s calculations are simple. In terms of the rules set by the Cabinet itself, the unit says, the only upgrades that could be legally paid for by the state were those proposed by the police and military, costed by the department of public works and then approved by the minister of police and the president.

In terms of the rules, the SIU says, the president must request a security evaluation of his private residence; the resulting plan must be put to him “for his consideration and consent”.

That initial plan, the SIU says, would have carried a price tag of R28-million. Another R33-million of the money spent is up for debate, or responsibility can perhaps be laid at the doors of other individuals, but a full 72% of the total spend should never have been spent.

Small suburb

The extra work done for that money turned the relatively humble homestead into a small suburb, with accommodation for an entire contingent of police, guards, drivers and helicopter pilots, with guardrooms, security control centres and a visitors’ centre, all larger than what was required.

Along the way, the unit, commissioned by President Jacob Zuma’s own proclamation, makes a powerful but incidental argument that the Zuma family appears to have benefitted unduly from the state spending. Among the items the SIU lists as “not a security requirement” are:

• R3.4-million for landscaping around Zuma family residences;
• R4-million for the “fire pool” and parking;
• R4-million for air conditioning in Zuma family residences;
• R4.5-million for roads inside the complex;
• R10.6-million for the relocation of households that were moved away from the Zuma family residences; and
• R21.2-million for lifts in and emergency escape tunnels under Zuma family residences.

Another R60.2-million, the SIU says, was spent without details of where exactly it went. The bulk of that money went to two contractors, Moneymine and Bonelena, both of which were, at the time, contracted by Zuma for work on his private, non-state-funded upgrades, and both of which were appointed to do security work precisely because they were part of the private upgrades.

Because of the way Makhanya made these payments to Zuma’s contractors, the SIU says, the state “paid for works in circumstances where it could not, firstly, ascertain what the specific scope of such works were; and secondly, whether or not such works were in fact done”.

In other cases, the SIU says, extra costs were incurred through a knock-on effect. In one instance the construction of 20 accommodation units for security staff – not formally requested by them – required an “overdesign” of sewer works.

Financial responsibility

The SIU claim lays financial responsibility entirely at Makhanya’s door. The architect, investigators say, had both professional and contractual duties in which he failed as the principal agent for the state. He over-designed security features, authorised work not related to security, overpaid for work that was done, paid for work that was possibly never done, and paid for work that could not be defined.

The claim against Makhanya also includes R5.6-million that the SIU says the architect was personally overpaid. It also lays the groundwork for future action against other parties.

As part of the judgment it seeks, the SIU has asked the court to declare that Makhanya’s appointment was irregular, which puts officials at the department of public works who appointed him in the line of fire. In detailing excessive payments to subcontractors, the unit also opens the door to possibly recovering money directly from such contractors should the courts not agree that Makhanya alone can be held responsible.

SIU: Primarily the president’s special weapon

The Special Investigating Unit (SIU) is a unique weapon in South Africa’s arsenal of public institutions.

It is primarily the president’s, mandated to investigate at his request and to report back to him on the outcome.

Depending on what the president asks it to do, the SIU lends investigating muscle to any department in national or local government and then assists it to recover public money lost by fraud or maladministration. The unit investigates and gathers evidence, then refers it to other government institutions for further action.

For example, it can refer the evidence back to the relevant department for it to take internal remedial or disciplinary action, as in the case of the 13 public works officials believed to have flouted procurement processes for the Nkandla project.

It also refers evidence of any criminal conduct to the Hawks and the National Prosecuting Authority, as in the case of the handful of senior public works officials who have since left the department but are alleged to have contravened the Public Finance Management Act, which holds civil servants criminally liable.

It can also refer civil claims to the courts, asking them to compel private or public individuals to pay back money they are alleged to have wrongfully received from the state, as in the case of Jacob Zuma’s private architect, Minenhle Makhanya.

Finally, the SIU must submit a report to the president.

The SIU report on Nkandla will be very different to the public protector’s. It will present the evidence it has gathered and outline the steps it has taken. There is no obligation for the president to make the SIU report public. On Thursday Zuma responded to the SIU’s interim report, the public protector and the interministerial task team committee. – Lionel Faull

- M&G