RAND WATER ANNUAL REPORT 2023
Consolidated Annual Financial Statements for the year ended 30 June 2023
Notes to the Consolidated Annual Financial Statements 39. Contingencies (Continued)
Figures in Rand thousand
Group
Rand Water
2023
2022 Restated *
2023
2022 Restated *
Contingent Liabilities
2.1. Rand Water has been sued for damages in the amount of R184 Million (2022: R184 million) in the High Court of South Africa.The damages claim emanates from a contractual relationship linked to a Consortium contracted by Rand Water for transactional advisory services for a mega sanitation project. One of the consortium partners brought a damages claim against both Rand Water and its partner, alleging they were jointly and severally liable. The said Consortium partner, as the Plaintiff, is claiming loss of opportunity to realise a profit and thus suffered damages. The damages claim is currently in abeyance as a result of the liquidation proceedings that have been brought against the Plaintiff by its Consortium Partner, and has been provisionally granted. The probability of incurring losses has been assessed as low as the prospect of success (a favourable court ruling) in this matter is high. 2.2. A Service Provider instituted legal proceedings against Rand Water for damages amounting to R74.5 million in the High Court of South Africa. In this matter, Rand Water was appointed as the Implementing Agent on behalf of the Department of Water and Sanitation. The claim is based on the loss of income alleged to have been suffered by the Service Provider due to Force Majeure (circumstances beyond the control of any the parties to the contract). The Default Judgment, which was the basis of this Claim, has subsequently been set aside in the High Court (in February 2020) and the claim no longer exists in its current format. The matter has been classified as of low impact on Rand Water as the prospect of success is very high. On 4 November 2016, a notice in the Government Gazette to inform all interested and affected parties that a Claim of restitution of land rights has been lodged. The claim affects certain Rand Water’s properties as they are situated within the area specified in the Notice. Rand Water continues to monitor the progression of the claim. 40. Irregular, Fruitless and Wasteful Expenditure and Criminal conduct Irregular expenditure is defined as expenditure incurred in contravention of, or that is not in accordance with, any legislative requirements notwithstanding that value was received. Irregular Expenditure incurred for the current year was identified in prior periods and arises from multi‑year contracts that are still in force. Other matter
Fruitless and wasteful expenditure is expenditure which was made in vain and would have been avoided had reasonable care been exercised.
Irregular Expenditure and Fruitless and Wasteful Expenditure Irregular Expenditure
513 474 636 194 513 474 636 194
Fruitless and Wasteful Expenditure
155
45
155
45
Closing balance
513 629 636 239 513 629 636 239
295
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