DA's multi-billion rand 'bungle', Taxpayers to bear the brunt

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Wednesday Oct 28, 2009

Ratepayers will bear the brunt of the ballooning costs of the City of Cape Town's R4.5-billion public transport system and the expected R99-million operating shortfall - by paying higher property taxes, parking and fuel levies, paying for permits to use the city's roads or by contributing to a new Local Business Tax.

It was estimated in August, 2008, that the first phase of the Integrated Rapid Transit (IRT) would cost R1.3bn

But a year later, the city council was asked to downscale the first phase because of unexpected cost escalations. These escalations are now under forensic audit and the findings are expected to be released this week.

The cost of the scaled-down version, not the original first phase which would have included the inner city service and trunk and feeder services to Table View, Atlantis and Dunoon, was set at R2.3bn in August.

But just two months later, this has almost doubled to R4.5bn and the service has again been trimmed in a desperate attempt to bring down costs.

The city's new head of IRT, Mike Marsden, admitted in a report released at a special mayoral committee meeting that "there is a risk that the operating costs projected by the operating cost model may not be accurate" and that the budget might need to be adjusted yet again in January next year.

City media manager Kylie Hatton confirmed that the city would have to look at getting alternative revenue from parking and fuel levies.

According to a financial and strategic assessment report on the IRT, the city could collect an additional R38m for every 1 percent that property rates are increased, based on the 2009/2010 property rates budget of R3804.9m. New property developments along the IRT route may be expected to pay development contributions.

The city said it could earn "significant" revenues from advertising. Almost R20m in advertising revenue could come from the full roll-out of Phase 1A. With national government approval the city could impose a levy on all nonresidential parking spaces, including all private parking in office buildings, shopping centres and parking garages.

The council could demand that all motorists buy a permit to use council roads. This permit system could add R584m to the city's coffers for the IRT.

The report recommended that the government be asked to increase the share of the nationally collected fuel levy allocated to cities working on public transport projects.

The city has reduced the size of its bus fleet for the 2010 shuttle service and scrapped the reserve service to save R40.2m.

However, to meet Fifa requirements of transporting
20 000 passengers hourly from the Civic Centre to the World Cup stadium, the city will remove seats from the buses to boost passenger loads.
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Link.
 
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*shrug* Does it make it any better knowing how much is being shelled into the Gautrain project?
 
Just out of interest, does the OP have an opinion on the news article posted ?
 
Clearly not.....

But what are the reasons for the cost escalations?.. are they due to poor budgetting, or because the taxi owners have toitoi'd etc etc thus pushing out the expected date of rollout, etc etc
 
// fsck - why don't they bare the brunt - i pay enough for average to ****ty services
 
One wonders if it is the DA's fault or if there is massive corruption.

Who ran the this prior to the elections? Was it the DA?
 
This article leaves out too much, I have read two similar articles and none of them give a reason why the escalating costs?
 
killadoob said:
One wonders if it is the DA's fault or if there is massive corruption.

Who ran the this prior to the elections? Was it the DA?
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Exactly. They did not start this, they inherited, to quote :

It was estimated in August, 2008, that the first phase of the Integrated Rapid Transit (IRT) would cost R1.3bn
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I don't recall the DA being in power back then.
 
This is not the DA's fault??? wow.....

And I don't care paying taxes and getting better roads, rather that than paying taxes and some government official buys himself a BMW with that money....

At least now I can see and use something that my tax money is paying for...
 
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If you consider what the Gauteng Provincial Government wasted on trying to regulate the taxi industry, construction of the Gautrain, construction of the Rea Vaya BRT system and the costs of maintain Metrorail and Metrobus, not to mention the Pretoria bus system which has fallen apart, it's not that great a number. And the IRT is supposed to be quite a far reaching system.
 
killadoob said:
One wonders if it is the DA's fault or if there is massive corruption.

Who ran the this prior to the elections? Was it the DA?
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Kosmik said:
Exactly. They did not start this, they inherited, to quote :

It was estimated in August, 2008, that the first phase of the Integrated Rapid Transit (IRT) would cost R1.3bn
Click to expand...

I don't recall the DA being in power back then.
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Actually the DA ran the City of Cape town before that. That is why Hellen Zille was the mayor. ;)
 
cr@zydude said:
Actually the DA ran the City of Cape town before that. That is why Hellen Zille was the mayor. ;)
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Interesting point, forgot she was mayor. Nice one.

Well at least it's being audited so hopefully some truth will tell.
 
The DA stuffed up (not the first time). They should step up, admit it + get rid of those responsible and stop trying to stuff it under the carpet.
 
ToxicBunny said:
Clearly not.....
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I recall the MOD's mentioning that just regurgitating news articles wasn't acceptable, bearing in mind that we all access these news sites directly.

TBlaar said:
This is not the DA's fault??? wow.....

And I don't care paying taxes and getting better roads, rather that than paying taxes and some government official buys himself a BMW with that money....

At least now I can see and use something that my tax money is paying for...
Click to expand...

True.
It's not even know yet what the cause of the cost increase is, but rest assured it's unlikely the usual cause we see in the ANC run provinces, ie. corruption etc., and if it is, it will be dealt with appropriately and not swept under the carpet as we've learnt to expect from the ANC.
 
Sackboy said:
The DA stuffed up (not the first time). They should step up, admit it + get rid of those responsible and stop trying to stuff it under the carpet.
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Can't see how organising a audit is sweeping under the carpet. Now a R47B aircraft, those need a mighty big carpet.... or would that be a flying carpet? :D
 
Kosmik said:
Can't see how organising a audit is sweeping under the carpet. Now a R47B aircraft, those need a mighty big carpet.... or would that be a flying carpet? :D
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Well not revealing the person responsible is very ANC-like to start with.
 
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