By PHILIP MACHANICK
James Kleynhans Water Treatment Works (JKWTW) was meant to be upgraded to double its capacity on a project that was due to complete end 2017. Then end 2018. Then not at all. Early 2019, we have a dire water crisis as a result. Water from the west side from Waainek Water Treatment Works was soon to run out and JKWTW was producing half its rated capacity of 10 megalitres a day on a good day, sometimes nothing at all. Some areas on the east were without water for weeks, water queues at the spring outside town started to form in the early hours of the morning and Gift of the Givers was called in to save the day.
Part of the intervention by government was to ensure that the first phase of the renewed JKWTW upgrade was completed in March 2019. This restored the plant to its designed capacity and on a good day, it produces 20% more – up to 12ML/day. For much of last year Waainek continued to produce enough to avoid water outages.
A promise from the government was to fast-track the planned upgrades of JKWTW. Imagine my surprise late last year that the tender had not yet been awarded. I am still trying to track down details but understand that SMME subcontractors are an issue in litigation. Since the project is being managed by Amatola Water who are headquartered in East London, local sources are not able to shed much light.
This is not the only instance of tenders going astray. During Ted Pillay’s tenure in the first half of 2018, Beaufort Street was resurfaced and we heard that a bigger project to resurface several major roads, in dire need of attention, was to be funded. This second project is mired in litigation with no end in sight.
While Ted Pillay was acting Makana Municipal Manager, he put a stop to a project to upgrade the Alicedale Sewerage Works that was almost awarded to a contractor who failed on track record scores. Why would you award a tender to a contactor with a poor record of success?
All of this leads to one critical question: who gains from incompetent tender awards? That leads to another question. What particularly favours such a development and how can that be changed?
Government awards contracts like this on the condition that 30% be awarded to local SMMEs. That, on the face of it, looks like a good idea, in an economically-distressed region particularly. But there is a flaw in the concept. If a local economy is depressed, patronage has extra power because the only resources to be had flow from the government. Consequently, there is a temptation to steer contracts away from contractors with a strong track record towards those most likely to be compliant with rewarding patronage networks. So the 30% SMME fraction becomes the patronage slice.
This would not be such a bad thing if the job got done. As infrastructure shortfalls are remedied, the investment climate improves leading to more work. Recipients of patronage, even if not super-productive, add to local wealth.
The problem is that this model perversely incentivises failure. Why? Because if the project fails and it is essential infrastructure, it has to be done again. And the patronage networks are greased again. Worse: if infrastructure continues to fail, government funding becomes the only game in town, making patronage all the stronger.
Even the corrupt in the end lose as they become parasites killing the body they feed off.
The solution? If the government wants to promote development of SMMEs and local skills, make that a separate project. Also, heavily police essential infrastructure projects for wrongdoing – throw the full weight of the law at any misconduct or corruption: SIU, lifestyle audits, the works. If the patronage slice is now a separate budget, it’s bad if it goes astray, but not the end of the world. If we carry on with decaying sewerage, water, roads and power infrastructure, the government becomes a ponzi scheme and there is no new income to pay for further development. Even the corrupt in the end lose as they become parasites killing the body they feed off.
So the remedy is simple. Remove the 30% SMME fraction from major infrastructure projects and instead award economically distressed municipalities grants to replace this funding. Police infrastructure projects rigorously so if any money does go astray it is out of a less essential pocket.
The cost of not doing this? An economic death spiral. Nationwide we are suffering an investment strike and our local economy is not better. More businesses are closing than opening; houses are hard to sell; jobs are scarce. Don’t tell me this isn’t a problem.
If my solution isn’t the right one, let’s hear others. One thing is for sure: we need a new approach because the old one isn’t working.
