Metro paying exorbitant cost for room at the top

The Herald Editorial Opinion 06/08/2010

FOR a municipality that has made something of a mission statement over its intent to save money wherever possible, the lease of office space at twice the price of other available premises in close proximity is incongruous.

And the fact that the Nelson Mandela Bay metro could be saving the public purse millions of rands by simply moving its communications department from privately-owned Kwantu Towers – where it takes up two floors – to a nearby municipal building, flies in the face of the cost-cutting measures for which Mayor Zanoxolo Wayile has rightly earned credit.

Paying exorbitantly high office rentals has been described by the SACP and DA as an unnecessary waste of municipal money at the expense of service delivery, and it is difficult to see it as anything other than that. But far more worrying is the deviation from official policy that governs the tender process in this case and the uncomfortable link between the owner of Kwantu Towers, Yossuf Jeeva, and ANC regional executive council chairman Nceba Faku, who have close ties.

The municipality retrospectively renewed what was a lapsed lease for 2009/10 as well as signing a fresh two-year lease without the process going out to tender and defended its action of not adhering to its supply chain policy by saying provision was made for this in exceptional circumstances. Of even further concern is that different reasons for the deviation have been offered.

While communications chief Roland Williams has attributed it to the cost of moving his department exceeding any savings, city spokesman Kupido Baron has cited proximity to City Hall as the motivation. Considering the new lease is worth R1.39-million a year – at least half of which could be saved – and the anticipated renewal of further leases with a 10% accrual, we believe Williams’s argument is deeply flawed.

And tellingly, the SA Local Government Association has never heard of “proximity” being used as a reason for a deviation from policy.

But whatever the reasoning, the bottom line is clear – the metro could be saving municipal coffers a pretty penny by either sticking to the tender process and obtaining competitive quotes considering the availability of nearby office space, or better still, making use of the municipally owned Algoa House. Such a move would demonstrate Wayile’s efforts at curbing expenditure are not just a flash in the pan.