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 More Cape Town projects get the axe
    May 23 2006 at 11:32AM Get IOL on your
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By Anel Powell

Two far-reaching projects - the City of Cape Town's transfer of assets to the regional electricity distributor RED1 and the implementation of the national Expanded Public Works Programme (EPWP), which aims to create a million jobs nationally - have been put on hold because of financial concerns.

And the proposed annual salary of R1,25-million for RED1's chief executive has been rejected as "completely out of line".

At a special mayoral committee (mayco) meeting on Monday, Ian Neilson recommended that the proposed salaries for RED1's top structure be reviewed. He emphasised that the benchmark should be the municipal salary structure, not Eskom's.
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RED1 chief executive Saleem Mowzer declined to comment.

Neilson was "gravely concerned that there is not enough information for us to know the financial impact of the city transferring its assets to RED1". Details of the transfer of staff and assets, including land, remained "unresolved".

According to the agreement signed by the council and RED1 in June last year, these assets are to be transferred in July.

But Neilson said there was scant information about why RED1 should be given council land and whether the transfer of staff would leave "gaping holes" in the council's structures.

"This is placing the city's financial position at risk. I do not think we should proceed with the transfer at this stage," he said.

Mowzer said there were "misperceptions" about the land transfer. The council, as the only shareholder, would transfer its land and all liability to RED1. But if RED1 disposed of land, it would do so only after consultation with the council. The council would also receive the proceeds of any sales.

Although the council had until December to transfer its assets, Mowzer said the delay would have cost implications.

"We are trying to coincide the transfer with the new financial year (which begins in July)."

Councillor Lionel Roelf said the cabinet had not reached a final decision about the composition of REDs. "To me it is quite a concern. We support the RED1, but we are a responsible city.

Before the transfer can be done we need all the data and I don't think we have all the data."

Mowzer said the cabinet had approved the formation of six metropolitan REDs and would decide soon on the national RED.

"I propose we do a full presentation to mayco if there are concerns."

Mayco decided that information about the cost implications of the council's implementation of the EPWP was inadequate.

Without a comprehensive report on how staff would be appointed in the EPWP, it would be impossible for the council to support its involvement, executive mayor Helen Zille said.

"There is no description of a fair and open process that would avoid political patronage. This (project) runs the risk of extending abuse and corruption."

EPWP's manager, Noma-Afrika Tshanga, said the programme would benefit "the poorest of the poor". Zille said this definition was too broad.

"Until proper employment policies are in place we should shelve this decision."

Belinda Walker, mayco member for corporate services and human resources, said the project proposed to spend R272-million in creating only 6 204 jobs.

"If the cost is enormous, we might be better off giving people the money."

Zille said the council should rather support training and skills projects that guaranteed long-term employment, instead of a costly programme that provided short-term benefits.

George Penxa, city director of the expanded public works and urban renewal programme, said: "It is not really up to us to create permanent jobs, but to create opportunities."

But Walker said the unanswered questions about the EPWP's projected jobs target, the cost of each job and the overall cost to the council were of concern.

The council should have done a cost-benefit analysis before binding itself to a national process without knowing what the outcome would be.


    • This article was originally published on page 1 of Cape Times on May 23, 2006
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