Zuma’s architect ordered to pay R147.2m for unlawful Nkandla upgrades

The Special Tribunal has ordered Minenhle Makhanya, the former architect and principal agent responsible for the security upgrades at former president Jacob Zuma’s private residence in Nkandla, to pay the National Treasury R147.2m.

This amount represents the financial loss suffered by the department of public works (DPW) as a result of unlawful conduct in the project, the Special Investigating Unit (SIU) said on Thursday.

Makhanya, who was Zuma’s private architect, became the central figure in the scandal after the DPW appointed him as the project’s principal agent without a public tender process.

In the public protector’s report on the security upgrades at Nkandla released in 2014, the report noted the project changed significantly when Makhanya, who had been involved in Zuma’s non-security construction works, was brought in to act as the department’s principal agent for the whole project while retaining his position as Zuma’s principal agent and architect.

“This is the period when the scale of work increased exponentially, leading to installations that were not recommended in any of the authorising instruments … and the cost of works escalating to over R215m,” the public protector report said in 2014.

Zuma paid R7.8m for non-security upgrades at his residence, which included the construction of a swimming pool and amphitheatre.

The judgment, delivered on Wednesday, found that Makhanya’s appointment and subsequent conduct in the Nkandla upgrades were unlawful and resulted in significant financial loss to the state.

The SIU was authorised to investigate the upgrades by Proclamation R59 of 2013.

After Zuma’s election as president, he became entitled to state-funded security and protection for himself, his family and his private residence.

The police and the defence force subsequently conducted security assessments and identified additional security measures, including healthcare-related requirements and other installations and services required at the residence.

Based on these assessments and the necessary approvals, the DPW initially determined the cost of the project at R27.9m. The amount was authorised and funding was secured by the department’s planned maintenance budget committee in August 2009.

However, a project manager from DPW appointed Makhanya as the principal agent responsible for implementing the project in August 2009.

The tribunal found that his appointment was not preceded by a competitive bidding or open tender process, that there was no emergency or other lawful justification for bypassing the applicable procurement requirements and that Makhanya was not listed as a supplier with DPW.

The SIU investigation found that, after his appointment, Makhanya authorised and oversaw the implementation of improvements that went beyond the security measures identified by the police and the defence force, resulting in the cost of the project escalating from R27.9m to R216m.

SIU spokesperson Selby Makgatho said that among the structures and works Makhanya authorised were tunnels with an exit and three lifts, 20 additional accommodation units for police and soldiers, a laundry facility, a visitors’ lounge, basement parking for the clinic, VIP parking, a “fire pool”, the relocation of households, internal roads, air-conditioning and extensive landscaping in the high-security area, which came to a total of R68.5m.

The tribunal rejected Makhanya’s arguments relating to prescription of the claims.

“It is regrettable that the first defendant (Makhanya) stands alone as the person against whom the Special Investigating Unit has launched action, as he clearly did not act alone in allowing the costs of the upgrade at Nkandla to balloon,” said Kate Pillay in her judgment.

However, as architect and principal agent, Makhanya bore the responsibility to ensure that the DPW did not incur fruitless and wasteful expenditure, the judge said.

The tribunal ordered Makhanya to pay the costs of the legal proceedings, including the costs of two counsel.

The SIU accepted Makhanya’s submission, reducing the total claim by R7.8m, which Zuma repaid as a contribution for non-security-related upgrades. This amount will be deducted from the total the tribunal deems just and equitable to be repaid.