Deadly Water (Part 5): A zombie in the water industry

Deadly Water is a five-part series. Read Part 1: The life and death of a tenderpreneur, Part 2: A trail of destruction across North West and Another Rooiwal debacle in Rustenburg, Part 3: The dominoes fall and Part 4: The land of lamb and gold. Or listen to our five episodes of the Deadly Water Podcast.

CMS Water Engineering was built up like a house of cards — shaky, precarious and one wrong move away from complete collapse.

Each layer had been slowly built up over the years. At first, the foundation seemed solid, with small local contracts in North West that matched up with what CMS Water was capable of delivering. 

But over time, as the tower got taller, more cards were added — bigger contracts and new subcontractors all piling on top and causing the base layer to buckle under the increased burden.

In 2022, it seemed like someone had finally flicked a card away and knocked the tower over.

Losing the R291-million Rooiwal wastewater treatment plant project should have been the end of CMS Water Engineering. 

It wasn’t. 

While the company was collapsing, its boss Rudolf Schoeman Jnr was extracting one last contract from the government: a R368-million deal to maintain what the government calls “the most important bulk water supply system in the country”.

One in 3 people in South Africa

The Integrated Vaal River System supplies water to one in three people in the country: it covers the whole of Gauteng, most of Eskom’s power stations, and mines and farms in Mpumalanga, North West, and the Free State.

In April 2022, CMS had been awarded a three-year contract for the “installation, maintenance, repair, refurbishment and upgrade” of pump stations in this system for the national Department of Water and Sanitation (DWS).

If anyone knew — or should have known — how destructive and incompetent CMS was, it was the national department.

For the past two years, municipalities and water boards had been begging CMS to complete the contracts it had already been awarded. In Zeerust, Sannieshof, Potchefstroom, Mahikeng, Parys and Hammanskraal, CMS’ projects were plagued by delays, unpaid staff, equipment that had been paid for but never delivered, and projects that had ground to a halt.

But ignoring all the warning signs, the Department appointed CMS as one of six companies to maintain critical pump stations with a budget of R368-million. Director-General Sean Phillips, who has relentlessly campaigned to clean up corruption in the water industry, even signed the contract. 

Skating through undetected

Asked how the department could have been oblivious to CMS’ destructive role in the water industry, spokesperson Wisane Mavasa told us that the department did not get involved in municipal tenders, so any red flags around CMS Water would not have been “readily available”.

Tenders for water and wastewater treatment plants are generally managed by municipalities or water boards, with no oversight or regulation from the national department. This means that when a contractor, like CMS Water, is not delivering, the department is largely oblivious. 

“[The department] only restricts the appointment of service providers that are flagged on the National Treasury list,” she said.

The Treasury maintains a list of tender defaulters — people or companies that have failed to complete a tender or lied to secure a contract and, as a result, have been blacklisted from government work for 10 years. 

But the Treasury can’t add defaulters to the list: it has to wait for the local municipality to cancel the contract and then report the company for blacklisting — and that process can take years.

The City of Tshwane has made several attempts to blacklist tenderpreneur Edwin Sodi and his companies over the failed Rooiwal wastewater treatment plant tender, but to date his name is not on the list.

What this means is that despite Sodi being on trial for corruption, fraud and money laundering over an earlier tender to identify asbestos houses in the Free State, there is still nothing that officially prevents him or his companies from securing more government contracts.

Horrific track record

Apart from the Treasury, another system that should have detected CMS Water’s equally horrific track record was the Construction Industry Development Board (CIDB).

CIDB grades are given to companies to demonstrate they have the necessary experience to complete big infrastructure projects. The grades are awarded based on the value of the contracts a company has completed in the past, but the system is also designed to raise red flags when a project fails.

“All public sector clients must register projects of above R200,000 in value on the CIDB Register of Projects,” said spokesperson Kotli Modise. “They must register these projects at the point of contract award, project completion, project termination and project cancellation.”

The register is not public, but municipalities and government departments have access to it.

“Unfortunately, not all clients comply… Projects that are not registered… are impossible to track as they bypass the system,” she said.

The R85-million Bospoort contract, that we covered in Part 2, was never added to the register, nor was the Sannieshof (R80-million) contract, which was cancelled in early 2022. The Zeerust contract (R91-million for the mechanical and electrical portion) was one of the few included in the register, but was listed as “active” even after the Ngaka Modiri Molema municipality cancelled the contract in June 2022.

Oblivious to these developments, the department signed the final contract in June 2022. 

The wolf at the door

The three-year Department of Water and Sanitation contract was a proverbial life raft to CMS Water’s sinking ship. 

A former CMS employee, who only agreed to speak to us if we hid their identity, told us: “Rudolf said… he will still keep CMS going with the Department of Water and Sanitation contract, and finish the Rooiwal project as well.”

It also gave Rudolf the ammunition he needed to fight the liquidators now banging on CMS’ door.

In April 2022, the local Caltex garage in Orkney had run out of patience, and asked the North West Division of the High Court to liquidate CMS for failing to pay its R563,000 petrol tab.

This amount by itself shouldn’t have brought a company like CMS Water to its knees — only a few months earlier it had recorded R98-million in turnover. However, it didn’t take long before another company came knocking with its own claim.

CMS Global Solutions was a monster of Rudolf’s own creation. In 2017, he and his business partner, Eric du Plessis, had established CMS Global in order to acquire big-ticket civil engineering contracts. But after a nasty fallout between the partners in 2020, CMS Global had gone belly up. 

Judy Muchiiri, one of Rudolf’s business partners, told us: “[Rudolf] kept on saying that Eric is coming for him… Eric is coming for the plane. Eric is coming for the yacht, Eric is coming for the house. So, he made it look like Eric was trying to finish him.”

Now, the liquidators for CMS Global were demanding that CMS Water pay more than R23-million from incomplete government projects that CMS Global had worked on. 

Although there was never a formal contract between the two companies, the liquidators suspected that R638-million worth of government contracts that were awarded to CMS Water were de facto CMS Global’s contracts.

“[T]he projects were tendered by utilising CMS Water, as agreed by Rudolf, but CMS Global attended to the contracts… it was agreed that the funds of CMS Global would be channelled through CMS Water,” the liquidators wrote in an affidavit.

In August 2022, the liquidators filed an urgent application in the North West Division of the High Court to have CMS Water placed in provisional liquidation. 

However, in a classic move from Rudolf’s playbook, he told the court that liquidating CMS Water would affect the “lives of literally millions of people” and “would mean that almost half of the country could be plunged into darkness”.

Old habits die hard

CMS Water had been assigned two areas under the DWS contract: the Vaal water scheme, which supplies water to the Lethabo and Grootvlei power stations, and the Usutu Vaal scheme, which supplies the Tutuka, Matla, Kriel, Duvha, Kendal and Kusile power stations, and Sasol’s Secunda plant.

Indirectly, CMS Water was now responsible “for providing electricity to more than 40% of the country”, Rudolf wrote in an affidavit filed in the liquidation case.

“[W]e are responsible for maintaining the pump stations which provide cooling water to the main power stations of Eskom… All of the aforementioned pump stations are National Key Points… Should this contract be terminated, a large part of the country could be plunged into darkness as the contract is already 10 years behind schedule and the existing infrastructure is deteriorating at a rapid rate,” he claimed.

“Additionally, we are responsible for maintaining the pump stations responsible for providing process water to the Sasol petroleum plant situated in Secunda. Should our contract be terminated, the complete Sasol plant could come to a standstill, which will result in major fuel and/or petroleum shortages nationwide.”

Exaggeration had been Rudolf’s go-to legal strategy when the Bospoort and Rooiwal contracts were threatened. 

Believing it might work again, he added a final dramatic flourish: “Should the liquidation order be made final, it will result in the project being cancelled… Should the tender be cancelled and re-advertised, it would mean that almost half of the country could be plunged into darkness until such a time a new contractor is appointed.”

But Rudolf was overplaying his hand: CMS would be in charge of repairs to the pump stations that move water between the different water schemes only if repairs were needed, and only once the department had accepted CMS Water’s quotes. 

Still, as with many things at CMS Water, there remains a lingering question: If the R368-million Department of Water and Sanitation contract had come through slightly sooner, would it have been enough to save the company?

“As long as Rudolf was alive, he was opposing the liquidation with all his might, saying that we can save CMS and that this is nothing to worry about, and that with the Department of Water and Sanitation tenders that’s been awarded to us, we are going to fix everything,” a second CMS employee told us.

The death knell tolls

With Rudolf fighting off the liquidation and a growing list of creditors, CMS Water was fast running out of assets to auction. Even parts bought for the Rooiwal project weren’t safe, as the City of Tshwane discovered. 

In an email to auctioneers in September 2022, a City official wrote: “It has been brought to City of Tshwane’s attention that the Fine Bubble Diffusers Aeration belonging to the City of Tshwane is under auction. May you please release the equipment as they belong to City of Tshwane.”

In spite of everything, Rudolf seemed reluctant to accept that CMS Water would soon have to close its doors.

“[I]t is virtually impossible for an institution with an order book of over R2 000 000 000 [to] be commercially insolvent,” he confidently told the North West Division of the High Court in October 2022.

But CMS’ books were misleading.

Typically, “trade receivables” — money owed by clients — is treated as an asset on a company’s books, and according to the official management accounts, CMS Water was still owed R35-million by clients. These were largely retention payments, the final 10% of a contract, paid once a project has been handed over and any snag lists resolved. 

But in most instances, CMS’ contracts had been cancelled, and in some, municipalities were looking for damages.

“[H]oe gaan jy retensie kry op ’n projek waarvan jy afgegooi is? As die terminasiebrief inkom, verloor jy enige regte op retensie,” the long-time staff member told the liquidators. (“[H]ow are you going to get retention on a project you’ve been dumped from? If the termination letter comes in, you lose any rights to retention.”) 

“[O]ns het al hierdie goed vir hulle almal gesê en dan daai Rudolf sal jou sommer reguit vra of jy dom-onnosel is.” (“[W]e told them all this stuff and then Rudolf will ask you straight up if you are a dumb idiot.”)

“Ja, hy’s ’n regte asshole,” another staff member added. “En al hierdie goed het ek vir hom gesê … hierdie gaan jou in die gat byt, en kyk waar sit ons.” (“Yeah, he’s a real asshole. And I told him all this stuff… this is going to bite you in the ass and see where we sit.”)

In January 2023, CMS Water was placed into provisional liquidation, and control of the company handed over to the liquidators. 

For all intents and purposes, this should have been the end of CMS Water. But like a zombie clawing its way out of the dirt, CMS Water simply refused to die without a fight — or at least without lining a few more pockets along the way.

Selby and the zombie 

Selby Construction is a civil engineering firm based in Tzaneen, Limpopo. 

Years earlier, Selby’s directors had been implicated in the On Point Engineering scandal that diverted millions of rand from the Limpopo Department of Roads and Transport to a family trust controlled by Julius Malema, then leader of the ANC Youth League.

Selby had survived the scandal, after the National Prosecuting Authority withdrew corruption charges, and in 2021 bid on the same Department of Water and Sanitation contract that CMS was awarded.

Selby lost out. But, comically, the decision to award the contract to CMS Water coincided with CMS’ decision to retrench all its staff. 

Sensing an opportunity, owner Selby Manthata stepped in.

In September 2022, Manthata signed an agreement with Rudolf to execute the Department of Water and Sanitation contract on CMS Water’s behalf. The deal, which is described in the liquidation papers, was that Selby Construction would do the work and take 65% of the profits, but that the contract (and 35% of the profits) would remain in CMS Water’s name. 

Between November 2022 and March 2023, Selby kept CMS on life support, executing R853,000 of work on the Department of Water and Sanitation contract on its behalf.

When CMS Water’s outstanding tax bill of R500,000 threatened to derail the contract, Selby paid that as well.

“That was part of our agreement, we [would] pay SARS on their behalf,” owner Manthata told us.

The department claims to have been in the dark about Selby’s role in maintaining the pump stations that, in Rudolf’s words, keep the lights on for “more than 40% of the country”.

Wisane Mavasa, the department’s spokesperson, told us: “All the documents… that were submitted to [the department] belong to CMS. Payments were also made into CMS’ bank account, and not Selby Construction. Furthermore, the Department of Water and Sanitation has a list of sub-contractors that were nominated by CMS when they submitted their bid, and Selby Construction is not one of those nominated subcontractors.” 

Manthata disputes this but declined to provide us with a copy of the letter that he said shows the department was wise to the arrangement.

In the end, Manthata told us, he was shafted as well: “There’s no payment that came from CMS to me. They’re owing us, even now. That’s why we terminated the contract, because they are owing us,” Manthata told us.

Still not dead

Even though CMS was being pursued from all sides, it still had two things going for it: one, the Department of Water and Sanitation contract had two years left, plus lots of unspent budget; and two, CMS still had a coveted grade 8 PE rating from the Construction Industry Development Board, meaning it qualified to bid for the most expensive government tenders.

Former CMS staff members told us that both Manthata and a former government official, Ntau Letebele, had shown an interest in buying CMS.

Letebele had been the head of Limpopo’s transport department but resigned amid the same On Point Engineering scandal that ensnared Manthata. 

During the last few months of Rudolf’s life, he and Letebele had become friends. Documents filed in the liquidation application suggest that Letebele had even started using a CMS email address. 

But when we spoke to Letebele last year, he denied that he ever had any real intention of buying the company. 

“Already at that time CMS was in trouble — that was common knowledge. So what would I be buying?” he asked.

But the claim that Rudolf had agreed to sell CMS Water was not that far-fetched. Muchiiri, Rudolf’s Kenyan business partner, told us that Rudolf was looking for a way out of South Africa.

“He kept on saying ‘South Africa is crashing, there’s load shedding, South Africa is crashing. I need to get out,’” she said.

Although Rudolf knew CMS was collapsing, he continued selling a pipe dream to what remained of his team — whipped up by his unique brand of charisma — that the right deal was coming their way soon.

“He was always working on ‘something so big is gonna come through, we’re gonna make so much money, I’m working on a massive thing’,” the first former employee told us. “He always said stuff like that, and all of his deals were too good to be true.”

The last night

One of the last photos of Rudolf was taken on 19 December 2022, the night of the ANC’s elective conference at Nasrec, and shows him at a table littered with empty Heineken bottles, Red Bull cans and bottles of Moët champagne. 

Hours earlier, Cyril Ramaphosa had been re-elected as the party’s president, and in the photo Rudolf is seen celebrating the win with a table full of ANC members.

In the shot, he looks drunk and it’s clear he has lost a significant amount of weight. But even with CMS Water crumbling around him, he still believed he could wheel and deal his way out of it. So he bent down, put an arm around an ANC comrade, and smiled.

“Dit is wat ek nou doen,” he told the former employee, sending them the photo over WhatsApp. “Dit was 3.30 vanoggend. Ons het nou die regte team.” (“This is what I’m doing now. This was 3.30 this morning. We now have the right team.”)

***

Three months later, Rudolf Schoeman Jnr was dead. 

There had been an all-night party at the house, but no one present appears to have seen or heard anything, and Rudolf’s body was only discovered hours later in a downstairs room.

Despite the blood on his face and hands, the police concluded that his death was due to “natural causes”. It took another five months and urging from his family before the police agreed to open an inquest into whether his death was suspicious.

Two years have passed, and the police have still not reached a conclusion about what led to Rudolf’s death.

“The police are still investigating,” police spokesperson Lieutenant-Colonel Mavela Masondo told us last year. “The police first receive the preliminary postmortem from the Department of Health and wait for the detailed postmortem report, which usually takes long. Once the detailed report is received, it’s then that the docket is taken to Inquest Court for a decision. In this case, the detailed postmortem report is still outstanding from the Department of Health.”

And a year later? The police told us they are still waiting for the detailed postmortem report. 

Theories we’ve heard in the course of our investigations are that Rudolf fell or died from a ruptured liver. But the obvious suspicion, that many people have voiced privately, is that he was killed when one of his many deals went south.

In the two years leading up to his death, Rudolf had become convinced that his life was in danger. 

“[E]very weekend he would call me and tell me ‘someone’s trying to kill me’,” Muchiiri told us. 

“It was always about a deal. There was nothing else. But sometimes it was also delusional… Like sometimes he would hear some noise in his house and be like ‘You see those guys are trying to sneak into my house, they want to try to kill me.’ I just never [knew].”

In the end, Rudolf died in a way that is eerily similar to how he lived: shrouded in mystery and surrounded by strangers. DM