In a landmark legal development in the long-running controversy surrounding former President Jacob Zuma’s Nkandla estate, the Special Tribunal has ordered the former project architect, Minenhle Makhanya, to personally repay R147.2 million to the National Treasury.
The judgment, handed down on Wednesday, August 26, represents one of the most substantial civil recovery orders secured by the Special Investigating Unit (SIU) against an individual contractor involved in state-funded infrastructure projects.
The Tribunal concluded that Makhanya, who acted as the principal agent and lead architect for the upgrades at Zuma’s private residence in Nkandla, KwaZulu-Natal, was unlawfully appointed and committed severe breaches of professional and statutory duties that resulted in massive financial losses to the state.
The historical background of the Nkandla saga
The roots of the Nkandla saga trace all the way back to May 2009.
READ: The curious case of Nkandla scandals
The upgrades to the residence were done under the guise of being standard state-funded security enhancements at the former president’s personal residences. Following security assessments conducted by the South African Police Service (SAPS) and the South African National Defence Force (SANDF), the National Department of Public Works (DPW) evaluated the baseline requirements for protecting the President and his family.
On August, 11, 2009, the DPW’s Planned Maintenance Budget Committee approved an initial security budget of R27,893,067.46.
However, procurement process compliance went out the window shortly thereafter.
On August 27. 2009, DPW project manager DJ Rindel issued a letter of appointment designating Makhanya as the principal agent.
The Special Tribunal found that this appointment violated Section 217 of the Constitution and the Public Finance Management Act, as the appointment was not subjected to a competitive bidding process, he was not registered on the DPW vendor database, and no emergency condition existed to justify bypassing competitive tender procedures.
Unlawful scope creep and cost escalation
Following his appointment, Makhanya authorised sweeping additions that far exceeded the core security parameters established by SAPS and SANDF evaluations, leading to total project expenditure spiralling from the initial R27.89 million authorisation to an incredible R216,010,478.24.
The SIU investigation established that Makhanya authorised and certified non-security improvements and over-designed structures amounting to R68,506,106.
These included subterranean tunnels featuring three lifts, 20 additional accommodation units for security personnel, a commercial-style laundry facility, a visitors’ lounge, VIP and clinic basement parking, extensive landscaping, internal road networks, and the now infamous “fire pool”.
The scope also absorbed costs for relocating 4.5 neighbouring households.
The Special Tribunal found that Makhanya certified payments exceeding prevailing market rates, approved billing for unperformed or undocumented work, and failed to obtain required written variation permissions.
He also authorised payments totalling R54,825,513 to two other contractors, in violation of standard building contract terms.
Legal accountability and consequence management
The Tribunal determined that Makhanya breached statutory and professional standards under the Architectural Profession Act, the Code of Professional Conduct, DPW’s Manual for Architects, and the Joint Building Contracts Committee (JBCC) agreement.
Delivering the judgment, Judge K. Pillay J addressed the broader context of administrative accountability surrounding the project:
“It is regrettable that the first defendant 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. However, as architect and principal agent, he bore the responsibility to ensure that the second defendant did not incur fruitless and wasteful expenditure.”
The Tribunal declared Makhanya’s original appointment contract null and void. Makhanya was ordered to pay R147,269,444.06 to the National Treasury.
This figure was calculated after deducting R7.8 million previously reimbursed by former President Zuma for non-security upgrades, along with interest at 11.25% per annum alongside legal costs for two counsels.
The SIU confirmed that in terms of the Special Investigating Units and Special Tribunals Act 74 of 1996, evidence of criminal conduct will be referred to the National Prosecuting Authority (NPA) for further evaluation.
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- The Special Tribunal ordered Minenhle Makhanya, the former project architect of Jacob Zuma’s Nkandla estate, to repay R147.2 million to the National Treasury due to unlawful appointment and breaches of professional duties.
- Makhanya was appointed without a competitive bidding process, violating Section 217 of the Constitution and the Public Finance Management Act.
- The initial Nkandla security upgrade budget of R27.89 million escalated to R216 million largely due to unauthorized non-security improvements and overpriced billing authorized by Makhanya.
- The Tribunal found Makhanya violated various professional standards, declared his appointment contract null and void, and ruled he must pay the amount after deductions and interest.
- Evidence of criminal conduct related to the case will be referred to the National Prosecuting Authority for further evaluation under the Special Investigating Units and Special Tribunals Act 74 of 1996.
