CACHALIA PROTECTS TOP OFFICIAL IN MOTORSPORT SCANDAL
Flawed motorsports contracts that broke the law and had to be renegotiated to save R100 million were signed last year by Mr Sibusiso Xaba, Head of the Gauteng Economic Development Department, but he is let off the hook completely by MEC Firoz Cachalia.
Is this the new era of accountability promised by Premier Nomvula Mokonyane?
In response to my exposé of these contracts, Cachalia has confirmed irregularities and contraventions of the Public Finance Management Act (PFMA).
According to Cachalia, the motorsports contracts were negotiated down from R137 million per annum to R117 million per annum, and the rights acquisition fees were reduced from R13.5 million to R3.4 million. Further efforts are being made to renegotiate the contracts, but may not bear fruit because they were so poorly drawn up.
This amounts to a total saving of about R100 million, which shows what a rip-off the original contracts were that Xaba signed.
No action is to be taken against him despite his failure in terms of section 51 (g) of the Public Finance Management Act to promptly inform Treasury of the intention to establish the Gauteng Motorsport Company. In terms of Section 83 of the PFMA, failure to comply with section 51 is financial misconduct for which an official can be dismissed, and can even be a criminal offence in terms of Section 86 if this non-compliance is willful or grossly negligent. This offence can lead to a fine or imprisonment not exceeding five years.
Xaba should also be charged with misconduct in terms of Section 83 (b) which refers to an official who "makes or permits an irregular expenditure or a fruitless and wasteful expenditure".
There were other admitted irregularities, such as non-compliance with exchange control regulations.
Cachalia chooses to overlook all of this, which is a great pity. He is also far too gullible in accepting the rosy projections of jobs created by the A1 Grand Prix and Super Bike events.
I have been contacted by many motorsports enthusiasts who are sceptical of the real benefits of these events which happen once a year, with a brief flurry of tourists and little else. Much more could have been achieved with relatively small amounts of money targeted to local events.
Controlling body Motorsports SA runs on a total budget of R11.5 million for the entire country. There are 37 recognised disciplines, ranging from go carts, drag racing, motocross and saloon car racing. A round of the world Motocross championship was staged in Nelspruit last year for R7.5 million, with good job-creation spin-offs.
Mr Mike Schmidt, a former Formula 3000 racing driver, shares the views of many in the industry that money spent on the Formula One and A1 Grand Prix is a "scandalous waste". He says that it "throws money at the wrong end of the business", instead of grassroots activities that can involve young people in various communities and have positive long term employment gains in associated industries.
Cachalia needs to listen to these voices, rather than those who stand to gain handsomely from hugely expensive international events that mostly benefit foreigners and a few well-placed locals.
I remain deeply suspicious that there may have been pay-offs, and regret Cachalia's rejection of a forensic probe into these contracts.
There are still many unanswered questions, including how much will be paid to local company Nightsbridge and what they have done to justify their fee.
Political accountability is most important, particularly the role of former premier Paul Mashatile who drove this project. Premier Nomvula Mokonyane should step in and ensure that this whole can of worms is fully investigated and charges laid where necessary.
Statement issued by Jack Bloom MPL, Democratic Alliance Gauteng Corruption Spokesman, August 13 2009
Click here to sign up to receive our free daily headline email newsletter
