'Zuma ministers' want Treasury to 'share the cake'

Water and Sanitation Minister Nomvula Mokonyane is leading a charge by pro-President Jacob Zuma ministers against the National Treasury - because she believes the department is behaving as the de facto leader of the government.

In an interview with the Sunday Times this week, Mokonyane called for the Treasury's wings to be clipped so that everyone could share the "cake".

This follows a heated cabinet meeting at which the Treasury came under fire, with some ministers accusing it of being a stumbling block to development.

Mokonyane said the Treasury's powers to decide which projects went ahead and which did not needed to be reviewed. "It can't be correct that Treasury [tells us] what can happen and what cannot happen. That's what cabinet is trying to reassert and say things must be brought to cabinet and ... discussed within cabinet."

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The Treasury's prudent approach to government spending has divided Zuma's cabinet.

The divisions intensified when the Treasury declined to make available funds to construct nuclear power stations - and instead allocated R200-million to a feasibility study.

Zuma himself reportedly expressed frustration with the Treasury at a recent ANC national executive committee lekgotla. His unhappiness has fuelled speculation about a cabinet reshuffle that would remove Finance Minister Pravin Gordhan.

At the centre of Mokonyane's unhappiness with Gordhan's department is the Mzimvubu water project in the Eastern Cape, which could cost the state R14-billion. It has been delayed while Mokonyane and Gordhan's departments bicker over funding and deviation from normal procurement policy.

Ministers are said to have had a "robust" discussion on the Treasury's powers and the Mzimvubu project during last week's cabinet lekgotla.

Gordhan reacted angrily when approached for comment on the supposed frosty relationship between his department and his cabinet colleagues. "That's bull," he told the Sunday Times on Thursday.

But Mokonyane said the arrangement requiring departments to get Treasury approval to seek funding for projects was frustrating.

"We have fiscal policy that says you should go on an open tender to deal with projects of this magnitude and yet we want to take the knowledge and get the resources that are coming out quite cheaper.

block_quotes_start When things have to be done, we need to all come together and, through Treasury, must say how do we share this cake and stretch it such that it realises the needs block_quotes_end

"If we have to deviate, we must get Treasury approval.

"Quite happy that through the president and cabinet we were told that we must get our act together and go past that hurdle. It is just that hurdle that is now outstanding but we're beginning to find one another. The project in totality requires about R14-billion and the worry is, as we delay then the costs will obviously escalate," she said.

In February last year, during bilateral talks, the Chinese government said it was willing to fund the project if construction was by a Chinese company. After that, then water and sanitation director-general Margaret-Ann Diedricks wrote to the Treasury for guidance on the "permissibility of deviating from standard government supply chain legislative processes and procedures for procurement of construction contracts".

The Treasury advised the department to put out the contract for competitive bidding.

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A senior government official told the Sunday Times it would be irregular if a bidding process was not followed.

"Their DG was advised to follow a competitive bidding process and not just accept any offer from China because it was preferred by the minister ... They want to avoid procurement and appoint China to provide funding and do construction, which could have serious implications," said the official.

At the cabinet lekgotla, ministers were divided, with some saying the project had to go ahead but others concerned about viability and cost.

It was decided to ask officials to find feasible ways to make the project happen. "There are no terms of reference and agreement for the loan. The loan is outside the fiscal framework," said one cabinet member.

Despite Mokonyane saying the Treasury's powers should be reviewed, she said ministers were now finding a way forward on the project, in the interests of the country. "I still hold those views [on Treasury powers]. I think what has been good from the ANC lekgotla is that policy rests with the ANC and when we get to government, our responsibility is to implement. When things have to be done, we need to all come together and, through Treasury, must say how do we share this cake and stretch it such that it realises the needs."

She said more than 604 villages around Mzimvubu did not have reliable access to clean water and 49 villages had no water at all. The department said the project was expected to create about 10,000 jobs.

ndenzeb@sundaytimes.co.za

jikat@sundaytimes.co.za