Khato Civils, the subcontractors removed from the R3-billion Giyani water project, is preparing to fight tooth and nail for its reinstatement.

This follows the water and sanitation department's announcement on Tuesday that the contract between Lepelle Northern Water (LNW) and LTE Engineering had been terminated. LTE was meant to connect running water to 55 Giyani communities and sub-contracted Khato Civils for the job.

The contract was terminated two weeks after a 6-year-old boy fell to his death into a trench, which was allegedly left open by Khato Civils.

But Khato Civils is not taking the termination lying down.

CEO Mongezi Mnyani told News24 that the company was "determined to fight until the end". Lawyers were perusing the matter, he added.

Asked if he had been given a reason for the termination, he responded that LNW said Khato had not been "on the ground".

But Mnyani said non-payment from the government led to work being halted.

"We are currently owed for work done about R40-million, and we are entitled to be paid back what rightfully belongs to our company so that we, in turn, can pay the employees we had to retrench".

Mnyani added that the non-payment led to a situation in which his company owed suppliers and other sub-contractors. He said he did not understand why the contract had been terminated.

In a letter sent to LNW's CEO, PK Legodi on December 3, which News24 has seen, Mnyani urged Legodi to pay so that Khato could return to the site to complete the project.

The water and sanitation department paid LNW R44-million in October. But Mnyani says to date payment has not been forwarded to Khato Civils.

"To date, we have not received any explanation or been called to a meeting to discuss the matter", Mnyani said.

This was not the first time that Khato Civils stopped work at the project. In August 2017, the construction company halted operations after its sister company, South Zambezi Engineering, which was meant to supervise the development, was not paid R50-million.

Both companies are owned by businessperson Simbi Phiri.

The Special Investigations Unit (SIU) is currently in the process of recovering R2.2-billion related to the LTE-Lepelle tender, which is reported to have been awarded irregularly.

In October 2017, City Press reported that the department awarded the contract to LTE and its boss, Thulani Majola, is a close ally of Environment Minister Nomvula Mokonyane.

LTE, in turn, appointed Phiri's companies for the engineering and construction work. The department then piled more projects on to the contract, bringing the value of work awarded to LTE to more than R5-billion.

The initial project was meant to cost just over R500-million within a time frame of nine months. The budget over five years has since ballooned to R3.5-billion.

The water project is now subject to an investigation by Public Protector Busisiwe Mkhwebane, after reports that it was incomplete and that the water department failed to pay contractors until recently.

The department said that the decision was made by LNW and further queries should be directed to it.

Efforts to contact LNW spokesperson Simon Mpamonyane were unsuccessful.