The Special Investigating Unit (SIU) has welcomed the arrest of nine people linked to an illegal R75 million water tanker tender at the Alfred Nzo District Municipality (ANDM) in the Eastern Cape.

The arrests follow referrals the SIU made to the National Prosecuting Authority after its investigation uncovered evidence of serious maladministration and corruption, according to SIU spokesperson Kaizer Kganyago.

What the SIU Says the Tender was for

Kganyago said the procurement deal covered “yellow fleet” vehicles meant to support water supply, sanitation and infrastructure work in the district.

He said the fleet included six trucks, six sprinkler water tankers and three jet vacuum tankers.

How the Procurement was Allegedly Irregular

The SIU said the contract was awarded to Kwane Capital (Pty) without budget approval.

Kganyago said the municipality paid R75 million to Kwane Capital without budget approval and in contravention of Regulation 32 of the Municipal Supply Chain Management Regulations.

He added that the company allegedly misrepresented ownership of the vehicles and unlawfully used the name of Avis Fleet, leading the municipality into contracts the SIU says were invalid and unlawful.

The accused appeared in the EmaXesibeni (Mount Ayliff) Magistrates’ Court on charges including fraud, corruption, money laundering and contravention of the Municipal Finance Management Act.

They were granted bail of R10,000 each, the SIU said.

Kganyago said the SIU found the municipality suffered an actual or potential financial loss of R60.7 million due to overcharging and excessive profit margins. The unit has launched civil action in the Special Tribunal to review and set aside the contract and recover losses.