Senior municipal official joins MK MP in court over alleged R1.6m water tender fraud

The Hawks have arrested a Joe Gqabi District Municipality official on allegations of water fraud.

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A senior Joe Gqabi District Municipality official has been arrested in connection with a R1.6-million water pipe tender fraud case. Dumisani Lusawana,a municipal water and sanitation manager,appeared in the Barkly East Magistrate’s Court after his arrest on 3 September and was granted R5 000 bail.His arrest brings to three the number of people facing criminal charges over the 2019 tender,including MK Party MP Mandlenkosi James Matutu,whose company was awarded the contract.For more political news,visit Politics News.The Directorate for Priority Crime Investigation (Hawks) has arrested a senior Joe Gqabi District Municipality official in connection with an alleged R1.6-million water pipe tender fraud case involving an MK Party member of Parliament.

The municipality is based in Ekhephini (formerly Barkly East) in the Eastern Cape.

Dumisani Lusawana,a manager in the municipality’s water and sanitation services,was arrested on 3 September and appeared briefly in the Barkly East Magistrate’s Court,where he was granted R5 000 bail.

The information was revealed in a municipal statement,which did not name Lusawana.

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Hawks spokesperson Warrant Officer Ndiphiwe Mhlakuvana confirmed Lusawana’s arrest and appearance in court.

Lusawana’s arrest brings to three the number of people who have been criminally charged in connection with a tender advertised on 1 December 2019 for the procurement and installation of water pipes intended to benefit the Ugie community. The contract was awarded to Vukabalele Trading CC.

In March,the Hawks arrested MK Party MP Mandlenkosi James Matutu,the sole director of Vukabalele Trading CC and Zim-Zet Trading (Pty) Ltd,and Thembelani Ngceba,a water supply manager at the same municipality.

Both have already appeared in the Barkly East Magistrate’s Court,where they were released on R5 000 bail each.

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Matutu,who was sworn in as an MP after the 2024 general election,is the highest-profile figure caught up in the investigation.

READ | MK Party MP charged with R1.6m water pipe tender fraud as residents face chronic shortages

The Hawks allege that the procurement process was deliberately manipulated through fraudulent and collusive conduct between the service provider and municipal officials entrusted with fiduciary responsibilities.

According to a statement from the Hawks,officials allegedly acting as end-users fraudulently certified delivery notes and invoices,falsely confirming receipt of water pipes. The municipality then made full payment to Matatu’s company despite the goods allegedly never being delivered.

“Further reports uncovered a pattern of financial transactions allegedly indicative of money laundering and illicit enrichment. Funds were allegedly channelled through various accounts,including transfers to Zim-Zet Trading (Pty) Ltd,an entity solely directed by principal accused Matutu,as well as to his personal bank account,” said Mdlakuvana.

Mhlakuvana said the municipality suffered an “actual prejudice” of more than R1.6 million.

In a statement dated 7 September,the Joe Gqabi District Municipality confirmed it had noted the latest arrest.

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“The municipality respects the rule of law and affirms that it will allow the criminal justice process to unfold without interference. The courts are the appropriate forum to determine the merits of the allegations and the evidence before them,” the statement read.

The municipality said it had instituted internal investigations into the tender award process and the processing of an advance payment for goods that had not yet been delivered when allegations of misconduct first surfaced. These processes,according to the municipality,were dealt with in accordance with the information and findings available at the time.

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“Where wrongdoing is established,appropriate administrative and disciplinary action will be taken in accordance with applicable legislation,collective agreements and the municipality’s internal policies,” the statement read.

News24 previously reported that Ugie residents face chronic water shortages,despite the tender having been intended to benefit their community.

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