Is the Chapman’s Peak toll plaza the DA’s own Nkandla?

Business Day : Opinion & Analysis
BY SIMON MANTELL, SEPTEMBER 20 2013

THE homestead for President Jacob Zuma at Nkandla has attracted publicity for all the wrong reasons, which include the contract cost, the authorisation and justification for such expenditure, the amount to be paid by taxpayers and the possibility that proper tender processes were not followed.

At the vanguard of the criticism of the homestead is the Democratic Alliance (DA), with the march by Western Cape Premier Helen Zille on Nkandla perhaps symbolic of the DA’s position that such expenditure requires proper exposure and examination.

Unless one has a jaundiced political perspective, it is very difficult to disagree with the DA’s stand on Nkandla, given the unbelievable economic hardship faced by the vast majority of South Africans.

Transparency and accountability are given high priority under the DA’s governance policy framework, yet it seems that there are some very good examples of the DA falling well short of its ambitions. The R53m toll plaza building on Chapman’s Peak in Cape Town is one example.

There are two contentious elements to the Chapman’s Peak pass: the rehabilitation of the mountain pass, which was a decision taken and executed by an African National Congress (ANC) provincial government with vehement opposition from the DA at the time; and the approval and construction of a toll plaza, which is solely the DA-run provincial government’s responsibility.

Insofar as the rehabilitation of Chapman’s Peak is concerned, there were a number of options presented — the provincial government of the time opted for what can best be described as the “Rolls Royce” option. An “innovative” private-public partnership was then created to complete the civil work and, to my knowledge, no audited and exact figures have ever been supplied on what this rehabilitation cost.

The subsequent approval and construction of the R53m toll plaza has been a source of bitter confrontation with ratepayer associations, civic formations and individuals on the one side and the provincial government on the other side.

This confrontation involved many contentious points, including but not limited to the fact that SA National Parks land would be appropriated for the buildings, that it would be unsightly, that it would be too big and that it was unnecessary. The DA provincial government eventually cleared all the hurdles and construction of the toll plaza is now almost complete.

The extensive coverage given by the media to the Competition Commission’s finding on collusion in the construction industry is most instructive and highlights an industry in turmoil given tough economic times.

With this in mind, it is worth looking at the toll plaza considering that a considerable amount of taxpayers’ money is at stake.

In a radio interview radio given by the DA MEC for public works in the Western Cape on August 26, the MEC confirmed the following: he did not believe there was a tender process for the project; an architect and an engineer had looked at the costs, meaning that no independent assessment had been done by quantity surveyors; the concessionaire (Entilini) for which the toll plaza was built had Murray & Roberts as a shareholder; the offices in the toll plaza were very basic and simple; the construction company responsible for the building of the toll plaza was Haw & Inglis, and Murray & Roberts was not a shareholder of Haw & Inglis; and there were 400 square metres of offices and 170 square metres of storerooms at the plaza.

What is known is that in the R53m approved by the DA for the toll plaza, the public works MEC approved R13m for the office and storeroom component. Storeroom building costs are about R3,500 a square metre and acceptable office space can be built for R7,000 a square metre. On this basis, the office and storeroom component could have been built for R3.4m and even if one allows a further 50% overrun, the costs should only be about R5.1m — appreciably less than the R13m approved.

In the interests of transparency and good governance, the following questions need to be asked and answered:

• Why was there no tender process when the spending of public funds is involved?

• Who decided on the scope of works — was it Entilini, the concessionaire, or was it the provincial government?

• If it was the concessionaire that decided on the size and finishes of the building, why was there no involvement by the province?

• Why were no independent quantity surveyors appointed?

• Was there an independent study done to ascertain what the requirements were for a toll plaza in terms of building size, given the staff complement to run the toll plaza?

• How can 400 square metres of offices be justified for 20 staff operating over a 24-hour cycle with a maximum of perhaps 12 employees on site at any one time?

• If the “offices are basic and simple”, how did they cost so much — R23,000 a square metre (R13m for 570 square metres) for the offices and storeroom combined?

• Who are the shareholders of Haw & Inglis, the company responsible for the construction of the toll plaza?

• As the toll plaza is such a contentious issue and if no tender took place, why does the MEC not know who the shareholders are in the construction company, given the sensitive nature of public funds?

• How can the DA MEC for public works claim that “every cent has been accounted for” and that “no overcharging has taken place”, given what appears to be a lack of oversight on this project?

The provincial government in the Western Cape appears to have been most remiss and potentially negligent in not interrogating the many aspects of the toll plaza construction and its projected costs, which points to a virtual mugging of taxpayers.

Zille continues to interrogate the arms deal and Nkandla in the interests of what is right. Why then, after the latest revelations on radio by her MEC concerning Chapman’s Peak, is she not asking the hard questions?

There appears to be mounting of evidence supporting allegations of dishonest dealings and collusion by large civil engineering companies regarding contract values for the building of soccer stadiums for the 2010 Soccer World Cup, and this sort of unethical practice is more than enough reason to question the contract value for the work that is being done at Chapman’s Peak.

In the interests of due process, transparency and good governance, there should be a full investigation to establish if malfeasance exists — and in the event of evidence revealing it, the “unwinding” of the project where applicable would be part of this due process.

South Africa’s economically downtrodden miss out on what should be improved service delivery financed by tax revenues.

Unfortunately, these revenues seem to be increasingly allocated towards political misadventures assisted in no small way by certain elements of the private sector.

Chapman’s Peak presents the perfect opportunity for the DA to demonstrate why it could be a better alternative than the ANC at national government level.

But a lack of will in correcting what appears to be patently wrong could also point to the fact that not much separates the DA from the ruling party when the inevitable push comes to shove.

• Mantell runs a biscuit factory in Cape Town.
Chapman’s Peak with Mantelli’s Biscuits – LISTEN

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