Other people’s money
Until a few minutes ago I had no idea what I wanted to write about in today’s Stokes’ Stage. Over the past week or two I’ve exhausted the e-tolling issue and written extensively about the so-called Secrecy Bill. And I’m not keen to plunge headlong into th
The reality is the group was ordered to cease all pothole repair work on roads under the jurisdiction of the Johannesburg Roads Agency (JRA) as far back as November 2011. The JRA told Dial Direct it had failed to comply with stipulations in the Municipal Financial Management Act and that work could not continue until the project was formalised through a tender process. Yes – believe it or not – a company offering to repair potholes “free of charge” has to win a tender to do so! At the time Johannesburg metro police department acting police chief, Gerrie Gerneke, said such projects were valuable due to the branding and coverage they provided to the companies involved. Quoted on IOL, 2 November 2011, he said: “Other companies are now asking why the city is in a permanent relationship with these projects – and why they cannot be involved.”
We understand the requirement to comply with municipal law. But surely the municipality will welcome an offer of free services with open arms? Were I in charge of Johannesburg roads I would have rushed to formalise this project and preferably award it to the company that had taken the initiative to implement it in the first place. In the absence of such urgency Dial Direct had no choice but to wait for the JRA to act. While they waited for details of the tender process the Pothole Brigade focused its activities on Ekurhuleni roads. Unfortunately the volume of repair work on these roads proved insufficient to warrant the R1 million per month operating costs incurred by the short-term insurer. Dial Direct has spent millions of rand (going back to August 2010) to cover the cost of staff, materials and equipment for the project.
So why quit?
Dial Direct took a decision to “pull the plug” on the project after five months of silence from the JRA… Aside from the efficiency concerns (already mentioned) their brand was suffering due to their inability to live up to the Pothole Brigade promise. Motorists, unaware of the ban on road repairs on JRA roads, continued reporting potholes to the insurer, expecting them to be repaired. The negative consequences arising from this situation are profound. Imagine if you will, an irate motorists screaming at Dial Direct for not fixing potholes that they are prohibited from repairing!
The Pothole Project dilemma is not unique. A similar situation arose when the 702 and Outsurance sponsored Privatised Pointsmen Project was “canned”, also in November 2011. This crisis was resolved speedily and the pointsmen and women were back at their points after just four days. A three-year contract was subsequently awarded in March 2012. The Privatised Pointsmen Project (JMPD / OUTsurance / 702) was awarded to Traffic Freeflow, an independent company that pioneered the concept of privatised pointsmen funded by corporate sponsorship. The initiative has been operating since 2005 and has grown from 21 pointsmen (and women) to a staff compliment of 180 today.
We cannot rule out a last minute intervention in the Pothole Brigade case, but as things stand Johannesburg motorists better buckle up for a bumpy ride! A defeated Dial Direct spokesperson, Bradley Du Chenne, told 702 Eye Witness News: “We made a huge difference to the condition of roads [in Gauteng] and were committed to doing so on an extended basis... Unfortunately government [the JRA] has not been playing ball with us.”
The “other people’s money” syndrome
There’s an old saying that goes: Money is the root of all evil… As I survey this story (and others involving mismanagement and corruption in the public sector) I cannot disagree. The problem compounds when “other people’s money” is involved. Senior municipal managers, government officials, members of Parliament and Cabinet ministers make daily decisions to spend millions of rand of taxpayers’ money. These decisions have no impact on their personal finances, and since there is limited censure for fruitless or wasteful expenditure, funds are spent with impunity.
This explains why there was no urgency among senior JRA personnel to put the pothole project out to tender. There are simply no consequences for failing to do so. The JRA is quite happy to muddle through as they did before the August 2010 private sector intervention. They will fix potholes using their own resources, or pay “preferred” contractors inflated prices to do so... Bottom line: No heads will roll for the latest dithering, which has “cost” the taxpayer some R12 million per year in sacrificed free services. The “other people’s money” syndrome is at the root of many of South Africa’s public sector failings. If you dig below the surface of any major government project you will find a similar pattern, because individuals in positions of power end up abusing “other people’s money” by overpaying on contracts that are frequently under delivered.
The long-suffering taxpayer is left with armfuls of unanswered questions. They might ask about the Gauteng Freeway Improvement Project, for example: If the SANRAL executive were forced to spend their own hard-earned cash on the project would it have cost R23 billion to complete? Would they have agreed to a R1.3 billion per annum charge to manage and administer an e-tolling gantry system? And would they have gleefully pursued a solution that would cost them R70.2 billion more – over 20 years – than an appropriate fuel levy alternative? (Estimates based on the Opposition to Urban Tolling Alliance e-Toll versus Fuel Levy document). You can direct similar questions to the decision makers responsible for Gautrain, the Arms Deal, any of the 2012 Soccer World Cup stadiums, and Transnet’s New Multi-Product Pipeline among others.
Editor’s thoughts: From their inability to invoice ratepayers accurately to their reluctance to allow the private sector to sponsor road maintenance, our municipalities never cease to amaze. As if the Johannesburg Roads Agency decision to can the Pothole Brigade were not bad enough, they added insult to injury by failing to implement the required tender process to allow the project to be reinstated. Do you blame Dial Direct for walking away from this “deal”? Please add your comment below, or send it to gareth@fanews.co.za
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