Welcome move on state’s office leases
THE government’s response to the crisis of "renting to government" enrichment schemes underlines once again this administration’s happy notion that if something doesn’t work, then the solution is for government to take it over.
The idea is just wrong, demonstrably so, not only in principle but in practice.
What is gratifying is the recognition that "renting to government" schemes can be corrupt and therefore an onerous burden on taxpayers. Public Works Minister Gwen Mahlangu-Nkabinde brought the matter up in a debate in Parliament last week. Ms Mahlangu-Nkabinde was clearly reflecting on the police headquarters scandal.
Earlier this year, Public Protector Thuli Madonsela took steps to terminate a R500m lease agreement for police headquarters in Pretoria which was being pushed by police commissioner Bheki Cele. The finding reflects badly, to say the least, on Gen Cele. It also implicitly, and at times, explicitly, found fault with procedures at the Department of Public Works. We cannot be certain, but it does not seem impossible that this lease agreement is merely the tip of the iceberg, and there are many such lucrative contracts between the government and its supporters — or even its members.
The parliamentary debate gave Ms Mahlangu-Nkabinde an opportunity to present solutions. Her proposal is essentially to remove the government from the leasing market, as far as possible. The idea is that the government should rather build and own its own buildings. Unfortunately, excluding the private sector entirely means throwing the baby out with the bath water.
The vast majority of businesses in the private sector could, if they wanted to, own their office space. Yet the most businesses don’t do it, and prefer to rent their office space. The reason is simply: most business prefer to focus on their core function which is most often not property speculation. Owning property can be hugely beneficial to companies — if they are lucky enough to buy at the right time and in the right areas. But it’s inflexible and can result in unexpected costs if the business expands or contracts quickly. Buying at the right time in the right area requires expertise that most businesses recognise they don’t have, so they avoid getting locked in.
Some businesses do own their own headquarters, and oddly, it tends to be a good indication of the business is past its prime. The government is in a slightly different position. While individual businesses might expand and contract, the government is much larger and much less volatile. There is in normal circumstances little likelihood of the government going bankrupt, and even if it does, most of its functions continue. Hence, permanent headquarters seem more sensible.
Yet the actual functions of government do change. Certain projects and tasks might require personnel for a limited time. New departments are required, and others become redundant. So rental might not be so inappropriate for the government as it might seem.
The question is whether the government is getting a fair deal — or to put it another way, whether taxpayers are getting a good deal. From industry sources, it seems the government is putting an extremely high priority on renting from BEE companies. This is generally laudable, but it does also invite corruption and tends to increase costs. It was exactly this kind of fake deal which resulted in the police commissioner getting into hot water. The irony is that the existing police headquarters is also being rented by the department from BEE businessmen associated with the previous president and therefore now out of favour. Clearly, this is a game that has been played for some time.
Ms Mahlangu-Nkabinde needs to ensure that all contracts are at competitive rates and conducted at arm’s length. But it seems more sensible to stick to renting property in the short term, rather than to take on the expense of building more government buildings in a situation in which office space is anyway readily available.
Manyi: When will JZ learn?
IT IS almost boring to have to remind President Jacob Zuma that he was warned. In fact, our impression is that either he doesn’t listen to warnings or he doesn’t understand them.
But when he appointed the president of the Black Management Forum (BMF), Jimmy Manyi, as the head of the Government Communication and Information System (GCIS) and thus as chief Cabinet spokesmen, the whole world warned him that Mr Manyi suffered a chronic series of conflicts of interest and that these would be politically damaging. He cannot be, the whole world said loudly, BMF president and chief government spokesman at the same time. Just as he could not be simultaneously director-general of the Department of Labour and head of the BMF.
But Mr Zuma knows best.
He was so irritated with Deputy President Kgalema Motlanthe appearing to grab centre stage when Nelson Mandela was hospitalised this year (Mr Zuma was abroad at the time), that he fired Mr Manyi’s predecessor at the GCIS.
Mr Manyi has since been at the centre of numerous storms (some not of his making, it must be said). Instead of telling the story, he has become it. It is a monumental, yet textbook, communications failure.
Now, the BMF’s efforts to force Business Unity SA (Busa), the leading business lobby, to appoint as its head a candidate nominated by the BMF has exposed the Manyi appointment for the idiocy it is.
Busa is the only business lobby the president speaks to, on the rare occasions he does speak to employers. To have his spokesman (in whatever capacity he may believe he is acting) also try to dictate the person who represents the other party is insane. Will Mr Zuma do anything about it? Probably not. He can’t.
But here is the effect of what Mr Manyi is doing: by his own admission in the state of the nation speech this year, Mr Zuma recognises that business will be the prime creator of most of the 5-million new jobs his administration has ambitiously promised by 2020. By allowing his spokesman to treat Busa, the primary chosen interlocutor, as a doormat, he will have directly helped to deflate the will of business to come to a party, the potential of which it is not entirely convinced of anyway. Mr Manyi has done real damage. But Mr Zuma is responsible for it.
FINANCIAL TIMES: Beef up cyber defences
THE march of cyber war from science fiction to fact continues apace. On Wednesday, Google revealed that, for the second time in two years, it had fallen victim to a cyber attack launched in China. As the world’s reliance on computer networks grows, such threats will only become more acute. It is crucial, therefore, that governments and companies take steps to combat this problem.
Despite moves this week by the US government to classify cyber attacks as an act of war (which might allow military retaliation), Cold War-style deterrence is not a realistic option. That puts a premium on defence. Here there is much governments and companies can do. Companies should isolate sensitive systems from the internet and other internal networks. They must control gadgets used by staff more tightly. Companies must get used to pooling details of security breaches with rivals.
Governments, for their part, must include the private sector in their defensive planning. An attack on the banking sector, for example, could be crippling. Yet most cyber- defence agencies focus on protecting the government and the military. That must change.
Ultimately, however, systems are no more secure than the staff who run them. The latest attack on Google exploited not technical but human frailty. That is something no amount of technology can cover. London, June 3
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