First world is fine – but not at any cost!
It must be wonderful being at the helm of post-Apartheid South Africa. All this money to burn! As taxpayers watch in awe the African National Congress (ANC) ruling party has poured billions of rand at a variety of causes… Most of the causes are just and s
The billion rand military blunder
The arms deal – can of worms that it is – started as a noble idea. We had to equip our army, navy and air force to play its role as a southern African power – as a self-appointed gatekeeper or peacekeeper if you like. But the deal was soured by money-hungry arms dealers and manufacturers, clearly in cahoots with politicians (or politically connected aides). Instead of buying the equipment the country so badly needed we bought the goods offered by those companies that “played” the best political game… It is well documented that the dealmakers ignored the recommendations of high-ranking military personnel when filling out the order forms! In the end the arms manufacturers paid over millions in bribes – those thus far admitted are just the tip of the iceberg – and promised millions more in offset deals they had little hope of delivering on.
In April this year City Press reported that the arms deal will ultimately cost taxpayers a whopping R70 billion, comprising the R47.2 billion basic cost (as communicated to Parliament by Defence Minister Lindiwe Sisulu in January 2011) plus billions in financing costs. What did South African taxpayers receive for this massive price tag? We took delivery of – and will ultimately mothball – dozens of state-of-the-art military machines. The air force received 24 Hawk advanced trainers, 26 Gripen jet fighters and 30 Augusta helicopters. The navy took delivery of four frigates and three multi-billion rand submarines. It has since been reported that the fighter jets are too expensive to fly! One of our submarines has been in the dry dock since 2006 and will only take to the water again in 2013. And it emerges that the navy’s operating budget is well shy of the R133 million per year per frigate and R30 million per year per submarine required to operate its new fleet.
We could have lived with this R70 billion whopper, and we may even have turned a blind eye to the flood of corruption associated with the deal, if the transaction made sense. A properly structured deal could have taken care of our military equipment AND operational budgets for decades to come. Instead we’re sitting with the most technologically advanced fighting machines in Africa with no hope of fully utilising them.
The “soccer for a month” debacle...
We’ve blown money on peaceful pursuits too… The 2010 FIFA World Cup ™ cost South Africa an estimated R33 billion in infrastructure development. Although some of this money was spent on much-needed road and civil engineering upgrades the bulk of the “price” relates to stadiums. Five stadiums were built from scratch and another five upgraded to the tune of R23 billion! Nobody can question the success of the World Cup, nor the long-term economic benefit to the country of hosting the event. But had we understood the ongoing costs associated with these stadiums we might have thought twice before rushing in!
A year after the event we’ve finally cottoned on that running and maintaining these stadiums costs way more than the revenues these venues can generate post World Cup. And that means ratepayers in the nine cities that hosted the event will have to “shell out” for stadium upkeep going forward. The R1.3-billion Peter Mokaba Stadium, for example, has a maintenance budget of R23 million per year and is currently subsidised to the tune of R17 million by the city (aka Joe taxpayer). In the Eastern Cape, one of the country’s poorest regions, it will cost R21 million each year to keep things ticking over at the R1.7-billion Nelson Mandela Bay Stadium! But the biggest white elephants are in Cape Town and Durban. The R4.4 billion Green Point stadium sucks up R46.5 million each year, while the Durban municipality has yet to disclose how much it costs to keep the lights on at the R3.4 billion Moses Mabhida stadium.
South Africa deserves praise for hosting a successful World Cup and government should be applauded for fast-tracking several event-critical infrastructure projects to make it happen. If only the individuals singing off on the stadium deals had spent a few weeks thinking about the long-term viability of these sizeable capital investments.
And the little engine that could!
And then there’s our new “high speed” railway project. Yesterday I set off on my first ever Gautrain ride. I docked up the R78 for my return ticket between Centurion and Rosebank station – and another R10 for parking. It was a fantastic experience. Everything was shiny and new. The employees were friendly, approachable and able to answer all of my ‘first time user’ questions. And the trains arrived and departed on schedule, like clockwork. Trouble is my 40-minutes (20-minutes each way) train ride provided ample time to think… Was this the public transport solution South Africa needed? A couple of days prior to my first commute the Gautrain Management Agency’s 19th Quarterly Progress Report showed that the cost of the project had topped R30bn and counting. And engineers still have to figure out how to ‘fix’ a water seepage problem on the link between Rosebank and Johannesburg – likely to cost at least another R100 million.
My favourite online reference site http://www.wikipedia.org/ defines public transport as “a shared passenger transportation service which is available for use by the general public, as distinct from modes such as taxicab, carpooling or hired buses!” Our local mini-bus taxi industry qualifies as a form of public transport distinct from the metered cab referred to in this definition – and the Gautrain is certainly a form of public transport too! But it’s not accessible to all. Yes, Gautrain caters to the general public, but the costs are so high that most South Africans will never set foot in any of its carriages.
The big question with this project, as with the others mentioned today, is whether the benefits are commensurate with the costs. Should we have sunk R30 billion on the Gautrain, a fantastic monument to concrete and steel engineering, or rather applied a fraction of this capital to creating a workable public transport solution using the existing and already established taxi and bus industries? Did we need to build such opulence into our stadiums, or would something functional have served the purpose equally well. And was it really necessary to sink R70 billion on “pieces” for our 2025 military museums?
Editor’s thoughts: There are plenty of big budget projects we could add to this list… Transnet’s oil pipeline between Johannesburg and Durban has tripled since its R9.5bn 2006 estimate. And Eskom’s massive coal-fired power stations at Medupi and Kusile are unlikely to be brought online within budget either. And then there are the government leases laid bare by the media in recent months… Is government doing enough due diligence before tackling massive taxpayer-funded projects? Add your comment below, or send it to [email protected]
