News24 | amaBhungane | Joburg awards R263m water tanker tender to two 20-somethings

• Two little-known companies, Nutinox and Builtpro Construction, have been awarded a R263-million tender to supply Joburg with water tankers for the next three years.
• Documents suggest that officials used creative maths to pick the winning bidders and overlooked what appears to be a shared "bogus" address which won them extra points for being based in Joburg.
• A current service provider, LTC Holding, has approached the High Court to have the tender set aside, meaning more pain is likely in store for Joburg's water-strapped residents. 

With the city in the grip of a crippling water crisis, Johannesburg Water has awarded a questionable R263-million contract to supply water tankers to two obscure companies, both owned and run by directors from the Eastern Cape in their 20s.

Nutinox and Builtpro Construction have been hired to supply Joburg with 70 waters tankers for the next three years. This includes 14 tankers in Randburg, eight in Midrand, five in Marlboro/Sandton, 12 in Soweto, 25 in Ennerdale, and three in Johannesburg Central, although the contract allows the City to order more tankers when taps run dry.

Yet amaBhungane's investigation uncovered significant red flags overlooked by Johannesburg Water, including indications of price manipulation, hints of collusion and fronting, and the fact that until recently, the two companies claimed to share the same address in Joburg's plush Waterfall Estate.

Hard to reach

For a company that has just been awarded half of a R263-million tender, Nutinox is hard to pin down. It does not have a website, making it nearly impossible to find information about the company's services, past projects or clients - an unusual gap for a company entrusted with the critical task of providing water to Soweto, Ennerdale and Joburg Central. 

READ | Most Joburg water systems recovering after 86-hour maintenance, but some still struggling

Officially, Nutinox is based at 1 Country Estate Drive in Midrand's Waterfall Estate, but when amaBhungane visited this address there was no sign of a thriving water tanker business and neither the leasing officer nor the security guards had heard of Nutinox.

Unofficially, Nutinox is based at a residential address in Oulap Street, Roodepoort.

We only know this because Nutinox submitted a lease agreement as part of its bid. When we visited the Roodepoort address, we found no sign of a thriving water tanker business there either, only a locked gate guarded by two angry dogs and a broken intercom.

When contacted, one of the owners told us: "The property at … Oulap Street belongs to my wife and I, and is my place of residence. No other person or entity is renting the property. This is quite disturbing to learn about your claim and I hope that you will be able to share who fraudulently used my details."

These addresses matter more than they would in most tenders.

Johannesburg Water scored the bids using a 90/10 points system, which allocated 90 points for price and 10 points for other criteria: six points for being located in Joburg, two points for being in Gauteng, and only two points for being a black-owned business with a turnover of less than R10 million.

Thanks to its apparently bogus Waterfall Estate address and the house in Roodepoort, Nutinox scored eight points out of 10. (It lost out on two points because it has a higher turnover.)

Nutinox's sole director, 29-year-old Sibuyile Magingxa, was equally elusive.

Like Nutinox, he claims to rent the low-key house in Roodepoort's Oulap Street. But according to his Facebook page, Magingxa lives in Umtata in the Eastern Cape.

READ | WATCH: Joburg mayor vows 'recovered' water supply by Christmas as golf estate residents fume

When amaBhungane contacted him, he said he was rushing to catch a plane and requested that we SMS him our questions. When we called again, he said he was in a meeting and put down the phone. Despite several follow-ups, he is yet to respond to any of our questions.

However, records show that Nutinox has high-profile connections.

On 1 September 2023 - the day after the Johannesburg Water tender closed - Tembile Magingxa, the president of the South African National Military Veterans Association (Sanmva), became a director of Nutinox.

Tembile was also active in the uMkhonto weSizwe Military Veterans Association (MKMVA) at the height of the organisation’s association with the Guptas and was a prominent backer of Jacob Zuma when he was still president.

The relationship between Tembile and Sibuyile Magingxa is unclear, potentially father and son or uncle and nephew. Despite repeated attempts to clarify, Tembile was not answering questions, stating over the phone: "I'm not the person for journalists or papers. Don't ask or tell me anything. If I've done wrong, report it to the authorities. Don't contact me again."

Tembile Magingxa did not stick around at Nutinox very long though.

According to records, he resigned as a director of Nutinox three months later and handed the reins back to Sibuyile, just in time for Johannesburg Water to select Nutinox as one of the winning bidders.

Another elusive director

Builtpro Construction, like Nutinox, is difficult to locate. AmaBhungane visited its listed address at 257 Oxford Road, Illovo, but security guards told us that the company had moved to another location a few months ago.

Like Nutinox, Builtpro had used this address to score extra points in the tender, even though its stay appears to have been short-lived.

In fact, if the bid evaluation committee had been looking closely, they would have spotted that until April last year, Builtpro Construction claimed to share the same apparently bogus Midrand address - 1 Country Estate Drive - with Nutinox.

What this could have suggested to a sharp-eyed official was that the two companies may be linked, raising a red flag about collusive tendering.

Yet nowhere in the 400-page bid adjudication report - provided to amaBhungane in response to a Promotion of Access to Information Act (PAIA) request - did anyone raise a concern.

On the surface, Builtpro looks quite capable of providing 30 tankers a day to service Joburg's northern region, including Sandton, Midrand, Hamburg and Randburg.

In fact, the records provided by Johannesburg Water show that Builtpro had already received two short-term contracts to supply water tankers in the city: a three-month contract in 2022 and a more substantial R40-million contract that lasted for six months in 2023.

Builtpro's website boasts that it offers a wide range of services - construction, plant hire, fuel supply, fibre installation, and water services - to a long list of private and public sector clients.

Yet Builtpro's sole director, 27-year-old Emmanuel Sserufusa, was evasive.

READ | Joburg water systems still recovering after Rand Water maintenance, says mayor Dada Morero

AmaBhungane sent questions to the info@builtpro.co.za email address, but when we called Sserufusa to check if he had received our questions, he said that the email address is not his. When we asked for his email address, he said he would call us back.

We followed up on WhatsApp and called him, but with no success. The office number listed on Builtpro's website also went straight to voicemail.

When we visited the Illovo office, a security guard told us Builtpro used to share an office with Zoliset, a third rival bidder.

The source who first alerted us to the tender had made a similar allegation, but when we approached Zoliset's director, Xolisile Guqaza, he vehemently denied any links between his company and Builtpro Construction:

First big breaks in the Eastern Cape

It appears that Builtpro and Nutinox got their first big breaks in the Eastern Cape, where both Sserufusa and Magingxa are from.

According to a source, Builtpro Construction secured a fibre installation tender in 2018 and then, during the Covid-19 pandemic, landed a R1.7-million contract to supply PPE to the Eastern Cape Department of Education.

Sibuyile Magingxa also climbed on the Covid bandwagon when another of his companies, M&S Traffic Services, received a R1.1-million contract to supply thermometers, sanitisers and masks to the Nelson Mandela Bay Metropolitan Municipality. This contract was investigated by the Hawks over a R70 000 excess payment, but ultimately no action was taken against Magingxa.

Nutinox, meanwhile, has been diversifying. Records from the government's Central Supplier Database list it as being in the accommodation and food business.

In 2024, however, Nutinox has suddenly appeared in other municipalities, securing a contract with the Rand West Local Municipality to clean up sewer spills and another contract with the Oudtshoorn Local Municipality to provide high-pressure jetting machines and vacuum water tankers, as well as to conduct camera inspections on sewer and stormwater pipelines.

READ | Johannesburg's water systems show signs of recovery post Rand Water maintenance

Yet these contracts pale in comparison to the size and importance of the ones they have just been awarded in Joburg.

Middlemen

It's worth remembering why Builtpro and Nutinox were hired: when taps run dry in Joburg - a city of five million people - water tankers are supposed to step in and provide a critical lifeline in the form of clean drinking water.

Over the next three years, the simmering water crisis in Joburg is expected to reach boiling point and it will be up to Builtpro and Nutinox to step in and save the city. But are they up to the job?

When Johannesburg Water advertised the three-year water tanker tender in July last year, it made it clear that the plan was to hire a whole panel of service providers so that the fate of the city would not rest on one company's ability to deliver.

However, instead of picking multiple companies out of the 92 that bid, Johannesburg Water picked just two (one to serve the north and one to serve the south), leaving Johannesburg solely reliant upon Builtpro and Nutinox - a decision fraught with risks, particularly during a water crisis where backup is crucial. 

In their bids, the two companies assured the City that they have more than enough tankers to deliver on the contract. Whereas the tender required 30 tankers in the north, Builtpro said it could provide 50. And whereas the tender required 40 in the south, Nutinox said it could provide 61.

"In total this contract will cater for seventy trucks as required by Johannesburg Water and a surplus forty-one trucks which can be utilised on and as and when required basis," the bid adjudication committee confidently wrote in its report.

READ | Complex gets exclusive Joburg Water tank, refuses to share with thirsty neighbours

Except that neither Builtpro nor Nutinox appear to own any tankers, leaving them reliant upon hiring tankers and hoping, for Joburg residents' sake, that enough are available.

The tender rules allowed companies to bid with hired tankers, even though this practice encourages middlemen and usually hikes up the price given that companies like Builtpro and Nutinox do little more than add their markup.

"If the tenderer's water tanker offered will be hired, the tenderer must provide proof of a letter of intent to hire the tankers offered… The letter of intent must commit that the equipment will be made available within 21 days of date of appointment," Johannesburg Water told bidders during the August 2023 briefing.

The Aqua connections

AmaBhungane's investigation suggests that both companies intend to lease some of their equipment from Astron Fleet, a spin-off of Aqua Transport and Plant Hire, which owns the largest water tanker fleet in South Africa.

Aqua is owned by Kevin Naicker, a prominent businessman from Durban with a track record of being implicated in collusive tendering and alleged corruption. In April 2021, the board of Johannesburg Water decided to cut ties with Aqua, owned by Kevin, as well as Aqua Bulk, which is owned by his brother Donovan.

READ | The family cashing in on government dysfunction

Water tankers previously owned by Aqua were later transferred to Astron Fleet, controlled by Donovan Naicker. At least eight tankers owned by Astron are on the list of tankers that Builtpro and Nutinox plan to hire.

This is not the only curious link between the two little-known Eastern Cape companies and the infamous Aqua group.

Remember the low-key house in Oulap Street with the two angry dogs? The house is owned by Syrina and Sugendran Ramsein and was, until recently, the address of a rival water tanker business, Kukhulu Plant Hire.

Last year, Johannesburg Water hand-picked Builtpro and Kukhulu for a six-month, R69-million emergency water tanker contract. Kukhulu bid again for the three-year contract, but this time was eliminated in the final round.

At some point in this process, Kukhulu moved out of the Oulap Street house and rival bidder Nutinox supposedly moved in.

Again, a sharp-eyed official may have asked why supposedly rival bidders were recycling in and out of the same addresses, but if anyone noticed, no one mentioned it in the official report.

We asked Syrina Ramsein whether there was any link between Kukhulu and Nutinox, but she seemed alarmed that we had visited the Oulap Street address and referred all questions to a "Mrs Naidoo", who turned out to be Stephanie Naidoo, a long-time employee of Aqua Transport, who, online records suggest left the company in 2021 to start her own business.

IN PICTURES | Joburg water crisis leaves communities in shambles

Naidoo (formerly Govender) was implicated in a 2021 forensic investigation, commissioned by Johannesburg Water, to look into allegations that Aqua and other companies had colluded to secure water tanker contacts. The investigation found that a senior supply chain official provided Naidoo with what appeared to be a fraudulent reference letter which Aqua used to secure more water tanker contracts.

We contacted Naidoo but instead got an emailed response from Sugendran Ramsein, the other owner of the Oulap house, claiming that Nutinox had "fraudulently" used the Oulap Street address to secure the R263-million contract.

Kukhulu, he confirmed, had rented water tankers to Nutinox, but that was it. Asked about Kukhulu's links to Aqua, he was emphatic: "I have no affiliation or business dealings with Aqua Transport."

This claim, however, appeared to unravel when another email arrived a few minutes later from the same email address informing us that "Stephanie Naidoo would like to recall the message" that Sugendran Ramsein had supposedly just sent.

We put it to Builtpro and Nutinox that the evidence pointed toward possible collusion - with each other and other bidders - and that it appeared they were acting as nothing more than middlemen, but neither company offered any response.

Creative maths

Despite all the red flags, the bid adjudication report shows that at the end of the day, Nutinox and Builtpro were the cheapest.

Or were they?

Of the 92 companies that bid for Joburg’s R263-million water tanker tender, 12 made it to the final round and were evaluated on price. But this is where the tender process becomes a little unorthodox.

At R2 502 and R2 525 respectively, Builtpro and Nutinox look far cheaper than the incumbents (LTC Holdings: R3 563 and Rampserv: R3 143). 

These figures, however, are a mishmash of normal rates (rand per kilolitre) and emergency rates (rand per hour) over three years, which were clumsily added together to form a single figure on which the bidders were judged.

Pull the figures apart though and Builtpro's R80/kilolitre puts it in eighth place out of 12 bidders, while Nutinox's R81.20 puts it in ninth, far behind Rampserv's R65/kilolitre and LTC's R75/kilolitre.

Johannesburg Water estimated that bidders will need to deliver 2 150 600 kilolitres of water over the next three years as part of its day-to-day business, equivalent to roughly 140 000 tanker loads. These deliveries, which make up 90% of the contract, are charged per kilolitre.

READ | Many Joburg residents already had no water... even before the 86-hour maintenance began

On top of this, the City estimates that another 215 060 kilolitres will need to be delivered in emergencies. These deliveries, which make up just 10% of the contract, are charged per hour. And this is where Builtpro and Nutinox had the most competitive rates. (Builtpro and Nutinox will charge R300/hour, versus Rampserv’s R360/hour and LTC’s R400/hour.)

The effect of the tender's creative maths is that companies with low emergency rates - like Builtpro and Nutinox - were catapulted into first position, even though emergency deliveries are estimated to make up just 10% of the contract.

The bid adjudication committee questioned this logic, but the officials that scored the bid defended it: "It is important to note that this is not a fixed contract; estimated quantities cannot be used to determine price... The highest ranking bidder will be rated on the inclusive bundled rates," the report notes.

The officials conceded that if the rates had been unbundled, Rampserv would have come first, but added: "The [bid specification committee] opted to use the bundled rates in order to avoid appointing different service providers for different categories such as for normal time, overtime and emergency respectively, this approach was used in the previous tenders and created a number of operational issues and was therefore changed so that single bidder can be appointed on all categories using a bundled rate."

Internal disagreement, external fights

Few people were happy with the decision. The finance general manager opposed the award, citing a 28% cost increase from initial estimates and a 20% rise compared to a current deviation contract. 

Despite this, Johannesburg Water pushed ahead. The contracts that were eventually signed with Builtpro and Nutinox in July this year are structured as "as and when required", leaving it uncertain whether the R263-million figure could balloon further.

When amaBhungane first approached Johannesburg Water in September with questions about the contract, we were told that the procurement process was ongoing, with letters of award issued to the recommended bidders subject to a 14-day objection period, as outlined in their supply chain management policy.

In fact, contracts had already been signed with Builtpro and Nutinox back in July, but one of the losing bidders, Strategic Persuasions, had objected.

According to the Bid Adjudication Committee report, Strategic Persuasions was disqualified in the first stage because the reference letter from Zululand District Municipality did not spell out that water tankers were used for the transportation of potable water.

In response to questions about the budget for the tender, Johannesburg Water told us to file a PAIA request.

Then last month we saw that Johannesburg Water had published the names of the winning bidders, so, we asked again. If everything was above board, we reasoned, Johannesburg Water should be able to address the allegations directly.

Instead, Johannesburg Water now claims it cannot comment as the matter is sub judice, ie, because it is the subject of a court case.

It told us:

What amaBhungane has since established is that LTC Holdings, one of the current suppliers, approached the Johannesburg High Court to have the contract declared invalid.

We wrote back to Johannesburg Water, explaining that it could not hide behind the much-abused sub judice rule. (AmaBhungane's advocacy co-ordinator, Caroline James, explains: Outdated reliance on sub judice hinders the constitutional imperative of transparency.)

Johannesburg Water refused to budge however, telling us that engaging with the media could compromise its case.

It said:

"In addition, engaging with the media before the matter is finally determined could undermine the principles of administrative justice and prejudice the fair resolution of the dispute. For these reasons, we respectfully maintain our position and differ from the interpretation advanced," it wrote.

Urgent legal action

Last year, the City awarded a smaller R43-million water tanker tender to LTC Holdings and Rampserv Consulting. The contract runs until February 2026, but both companies also bid for the R263-million tender that will run until mid-2027.

LTC wants the court to find that the tender had lapsed before it was awarded to Builtpro and Nutinox, and that the decision to award the contracts was unconstitutional and should be overturned.

LTC argues that the bids were only valid for 90 days, and that Johannesburg Water broke the rules by asking for a string of extensions, first from December 2023 to February 2024, then from February to April, and finally from April to May.

"The mere fact that [Johannesburg Water] extended the validity period for so many days in itself constitutes an irregularity. Where the tender document stipulated a tender validity period of 90 days, [Johannesburg Water] attempted to extend the validity period to a startling 241 days," LTC's director David Lesito said in his affidavit.

READ | Johannesburg has a water leaks problem. Here's what's being done about it

Lesito argues that even if the tender validity period was properly extended, Johannesburg Water's failure to include LTC in the tender award amounts to an irregularity. LTC had submitted a fully compliant tender, he argues, and was among the highest-scoring bidders.

The bid adjudication report shows that at R75/kilolitre, LTC was more competitive than Builtpro (R80/kilolitre) and Nutinox (R81.20/kilolitre) for day-to-day deliveries, but lost points because its emergency rate (R400/hour) was higher than the two winning bidders’ (R300/hour).

Lesito also argues that Johannesburg Water took months to publish the list of winning bidders.

The case will be heard in January, but with the R263-million tender now in question, Johannesburg's water-strapped residents are likely in for more pain.