Media Monitor, 24 February 2011

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1. Budget

1.1 Jobs on top of Gordhan's list

Anna Majavu, Sowetan, 24 February 2011

FINANCE Minister Pravin Gordhan has announced a multi-billion rand plan, giving the government's drive to create jobs a shot in the arm.

"As you have emphasised, Mister President, our aim is to put development first, and not dependence on welfare. The budget therefore proposes a range of measures to accelerate employment creation over a period ahead," Pravin said, announcing his R889billion budget.

The budget also includes R8billion allocated for the introduction of the much-awaited National Health Insurance Fund.

The job creation measures include the much-contested R5billion youth employment subsidy, skills development and the upgrading of public infrastructure. Last year unions came out against the youth employment subsidy, arguing that it would lead to employers preferring lowly paid, inexperienced youth against older, experienced workers.

Yesterday, Pravin said the matter would be discussed both in Parliament and at Nedlac, where labour is represented.

"We must offer young work-seekers real hope where at present there is despair. We need to do things differently. We need to have courage to pilot new approaches and build new partnerships," he said.

The measures also include:

R9billion job fund announced by President Jacob Zuma last week to co-finance public and private sector employment projects;

R14billion for further education and training colleges and the stepping up of student financial assistance;

A R73billion extended public works programme aimed, among others, at maintenance of roads and other public infrastructure;

Over R20billion going to Sector Education and Training Authoritiesand R5billion to the National Skills Fund for training job seekers.

Reverting to the government's social responsibilities, Pravin announced an increase of the disability and care dependency grant by R60 a month to R1160.

This is less than last year, when pensions and disability grants were boosted by R70 a month.

"Social security should not cultivate dependency, nor act as a disincentive to look for work," Gordhan said.

Foster care grants will increase by R30 to R740. Child support grant is to increase from R250 to R260 in April and to R270 in October. Pensioners over 75 years will this year get an additional R20, giving them R1160 a month.

Gordhan also introduced only a tiny tax break for people earning less than R4900 per month.

This year, people under 65 will only start paying tax if they earn more than R59750.

Also as part of social development, government is to upgrade 400000 homes in informal settlements by 2014.

About R8billion has been set aside for schools infrastructure to address classrooms backlogs .

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1.2 2011 budget widely welcomed but what will Cosatu say?

Chantall Presence & Stephen Grootes, Eyewitness News, 24 February 2011

Opposition parties on Wednesday applauded Finance Minister Pravin Gordhan for a balanced budget, saying he showed that he and the Treasury are in firm control of the country’s economic policy.

They said the R979 billion budget was balanced and applauded Gordhan’s pronouncements on the billions being pumped into job creation. But, the South African Communist Party (SACP) raised concerns over the youth wage subsidy, which trade union federation Cosatu rejected when it was first mooted last year.

The federation is yet to comment on the budget and Gordhan is expected to face a slew of questions about the subsidy when he answers to Parliament’s finance committees on Thursday.

Democratic Alliance (DA) MP Dion George said the minister’s commitment to a youth wage subsidy in the face of stiff opposition from Cosatu was commendable.

"There is going to be fireworks because we know that the minister is taking quite a courageous view, we know the trade unions do not like this," said George.

ANC MP Thabo Mufamadi said he was confident all sectors, including labour, would eventually buy into a youth employment subsidy.

While opposition parties were generally happy, economists suggested that the 2011 budget will not create many jobs.

Econometrix economist Azar Jammine said despite the focus on jobs, he does not see how this budget will lead to job creation, “I do not see within the budget itself any major element that is going to succeed in creating a lot more jobs."

But, the South African Chamber of Commerce and Industry’s (Sacci) Nuren Rau said the youth employment subsidy will help,"We hope to see greater numbers of youth taking advantage of the subsidy in rural areas."

He said business welcomes this budget with open arms.

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1.3 Gordhan's 2011 budget draws praise

STUART GRAHAM, M&G, 24 February 2011

Finance Minister Pravin Gordhan appeared to please nearly everyone in his 2011/12 budget on Wednesday, with economists, estate agents, vehicle makers and even heavily taxed tobacco producers giving their approval.

Razia Khan, an economist for Standard Chartered Bank, said Gordhan had chosen job creation over fiscal discipline in the budget, but that South Africa had "earned" the space to do so.

"Meeting the seemingly conflicting objectives of job creation and fiscal consolidation was always going to be difficult, and South Africa has clearly opted to focus on the former," Khan said. "With a relatively well-established reputation for fiscal management, South Africa has in a sense earned itself the fiscal space to do so."

There had also been an expectation that measures would be announced to weaken the rand exchange rate.

"The headline takeaway here, with everyone expecting perhaps further measures to weaken the ZAR [rand], is that nothing new has been announced."

Liberty Retail South Africa strategist Rowan Burger welcomed the budget's focus on job creation.

"It is far more important and efficient to improve employment than pay out unemployment benefits, and to improve health than pay out death and orphans' benefits," he said.

Vehicle manufacturers welcomed the budget, but were concerned about the increase in ad valorem tax on cars bought for more than R900 000.

"The increase in the ad valorem tax on new motor vehicles with a purchase price above R900 000 came as a surprise and would affect about 1,5% of new cars sold, yielding an additional R150-million per annum to the fiscus," the National Association of Automobile Manufacturers of South Africa (Naamsa) said.

'Appropriate strategic response'
Gordhan announced that the general fuel levy would increase by 10 cents a litre of petrol and diesel from April 6 and the ad valorem excise tax on cars that cost more than R900 000 would increase by 5% to 25%.

However, Naamsa said the budget "represented an appropriate strategic response to the many challenges facing South Africa".

"On balance, the budget was mildly expansionary and would support improved economic activity levels in the South African economy in the short to medium term," Naamsa said.

The Southern African Clothing and Textile Workers' Union (Sactwu) welcomed the funds set aside for incentives supporting the clothing, textile, footwear and leather industry.

"Our preliminary response is that we welcome this development," Sactwu general secretary Andre Kriel said. "We will now investigate the announcement in more detail and will issue a fuller statement over the next few days."

Trade union the United Association of South Africa was disappointed, with spokesperson Andre Venter anticipating a dark time ahead for ordinary workers amid looming increases in food prices and the already high oil price

Estate agents were gleeful about an increase in the transfer duty exemption for properties, from R500 000 to R600 000, and said this would make a "meaningful" difference to first-time buyers.

"The move is a surprise given that property prices have not really increased to the degree that would necessitate an inflationary increase in the threshold," said Herschel Jawitz, the chief executive of Jawitz Properties.

Jan Davel, MD of the RealNet property group, said the announcement was the "most obvious good news" for the property industry.

'Crucial step in the right direction'
Democratic Alliance finance spokesperson Dion George said the inclusion of a youth wage subsidy in the budget was the most effective solution to start creating jobs for the young and unemployed.

"The inclusion of this policy, and a R9-billion jobs fund, is a crucial step in the right direction towards the adoption of growth-oriented economic policies," he said.

Mario Oriani-Ambrosini, of the Inkatha Freedom Party, said the budget showed national consensus on the country's priorities. However it did not break away from a fiscal paradigm that could not work in the long run.

"South Africa is a welfare state which dreams of becoming a developmental state," he said. "This is a legitimate dream, but the budget doesn't yet concretise this into plan."

Even British American Tobacco (BAT) commended Gordhan for maintaining a stable excise rate on tobacco products.

"By maintaining a total tax incidence of 52% on cigarettes, the minister has acknowledged the importance of balancing tax collection with not unduly hiking pricing levels that stimulate illicit trade," said BAT corporate and regulatory affairs director Fay Kajee.

Gordhan announced that smokers would have to cough up 80 cents more for a packet of cigarettes.

The hike would mean that the recommended retail price of BAT in South Africa's biggest selling brand, Peter Stuyvesant, would increase by R1 from R24,50 to R25,50. -- Sapa

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1.4 SADTU Welcomes budget

Jacaranda 94.2, 24 February 2011

The SA Democratic Teachers Union (Sadtu) on Wednesday welcomed the 2011/2012 budget speech by Finance Minister Pravin Gordhan. "We note that education continues to receive a sizeable budget (R189,5 billion)," spokesman Mugwena Maluleke said in a statement.

"This is an indication that the government continues to prioritise education as a key tool to addressing the problem of skills shortages in the country." He said Sadtu had also noted that the budget had also made provision for the other government priorities such as job creation, health, housing, rural development, and fighting crime.

"Overall, the budget shows the country's commitment to creating job opportunities and skilling the youth." However, the union was concerned about the R5 billion employment subsidy for the youth. "From Sadtu's point of view, these subsidies may be open to abuse by the employers," Maluleke said. "They can create a situation where full time employment is sacrificed in favour of subsidised employment. Would this not lead to a situation where the youth may never receive permanent employment?"

Sadtu called on government to consult all the stakeholders on this particular matter and called on government to develop mechanisms so that the system was not abused. There also needed to be strict monitoring of processes of consultation at the National Economic Development and Labour Council and continuous report backs to all structures, Maluleke said.

Sadtu noticed the following additions to spending plans: An amount of R8.3 billion added for schools infrastructure, R9.5 billion for expanding further education and training colleges and skills development and under R1 billion added for funza lushaka teacher bursaries.

"Overall, this budget will not increase the number of teachers to be employed. This is quite disturbing because teachers are the most important input towards quality education," Maluleke said.

The budget was also not clear about measures to increase administrative personnel in order to unlock the time needed for teaching by teachers. Failure to address this would go against the President's Triple T campaign which called for more Teachers, Texbooks and Time, he said.

The budget was also silent on the conclusion of Occupation Specific Dispensation and salary adjustments. "We need better remuneration for teachers so that the profession can attract and retain new talent and quality teachers," Maluleke said.

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1.5 ANC youth whine over nationalisation of mines

Business Report, 24 February 2011

Despite the ANC Youth League’s desperate attempts to clamour for attention from the party’s grown-ups, Pravin Gordhan, the most sensible cabinet minister of all, hardly paid it any attention in his Budget speech apart from a reference to job-seekers learning woodwork.

On the subject that has attracted many tantrums, nationalisation, not a word was spoken yesterday.

Gordhan was probably too busy with serious matters to have seen a particularly bizarre comment on how the tots in the party creche planned to treat the research commissioned by the ANC into the vexed issue of grabbing mines.

“It is our considered view that the research process on nationalisation of mines should be satisfactory to all interested parties in the national liberation movement to avoid unnecessary conflicts,” the league said yesterday.

The ANC said that a research project into models of state ownership of the country’s mineral wealth was under way and would focus on some case studies, including Botswana, Namibia, Zambia, Brazil, Venezuela, Chile, China, Malaysia, Norway, Sweden, Australia and Bolivia.

In a statement, the league has opposed the inclusion of one Paul Jordan – who sports a doctorate in mineral economics – in the research team tasked to establish whether the controversial policy should be introduced in South Africa.

Others in the team are University of the Witwatersrand researcher Pundy Pillay and Margaret Chitiga-Mabugu of the Human Sciences Research Council. The league objected to Jordan’s inclusion as one of the researchers because he has publicly opposed the nationalisation of mines.

“We call on the ANC to reconsider his inclusion in the research team because he is prejudiced and his contribution will forever be questionable, because his views contradict the Freedom Charter.”

Simply put, the brats are saying that unless the research gives them the result they have preordained they will throw their toys and stamp their little feet. Again.

Wines

The few South African visitors to the UK who can afford to eat in top restaurants there, even with the stronger rand, must be agreeably surprised by some of the prices for fine wines.

The recession has caused budgets for corporate entertaining to be cut and even customers rich enough to pay from their own pockets have tended to think twice before ordering.

As a result, some restaurants have cut their substantial mark-ups to more reasonable levels in order to sell more.

Restaurant chain D&D London, which owns upmarket venues including Coq D’Argent, Paternoster and Launceston Place, has cut the prices of 2 000 fine wines and reports a “fantastically positive reaction”. A director of D&D explained that the company preferred to sell more wine at a lower mark-up.

At D&D-owned restaurants, for instance, a bottle of Cristal Louis Roederer 2002 champagne that normally costs £323 (R3711) is now selling for £156.

Most South African wines exported to the UK tend to be sold in supermarkets where, until the rand strengthened, they had a price advantage over European, Australian and South American wines.

The strengthening of the rand caused demand for our value-for-money wines aimed at this market to fall. But Don Tooth, the chief executive of Vergelegen wine estate, owned by Anglo American, says sales of his fine wines have increased in the UK market.

Perseverance and continued marketing through the recession paid off, while some other South African wine estates gave up and either sold their export wines in our own fiercely competitive domestic market or looked for new ones such as China. He says Vergelegen has made some inroads in China with its top-end V range.

Wal-Mart

The impact of Wal-Mart Stores’ entry into South Africa through its acquisition of a 51 percent stake in Massmart was highlighted this week by Shoprite chief executive Whitey Basson.

Expectations that Wal-Mart will import vast quantities of far cheaper food than can be produced locally could see factories closing in South Africa and jobs lost.

Other worries over the deal are that other retailers facing such competition will also trim jobs in order to compete.

There is not much that can be done to stave off these consequences, besides barring the deal altogether.

The Competition Tribunal will hold its hearings next month after the Competition Commission unconditionally approved it. It can hardly impose conditions on Massmart and Wal-Mart related to job losses that may occur in other businesses.

Nor can it impose restrictions on imports as it would then have to apply the condition to all retailers, which already import to varying degrees everything from frozen chicken to clothes.

Restricting imports would directly undermine the business model of this particular retail giant. Wal-Mart is able to offer consumers what it calls “Every Day Low Prices” because it has the ability through exceptionally vast and efficient distribution networks to source cheap food and merchandise. But perhaps there is another way. Minister of Economic Development Ebrahim Patel is currently facilitating talks with the two businesses and unions in the hope of resolving some of these issues before the tribunal hearings.

Patel said recently: “What we would be seeking to ensure is that there is strong local procurement, that the South African supply base is supported and that our capacity to create jobs locally is highlighted.”

But even with such a pact, the tribunal will face the conundrum of trying to weigh up the net effects of the deal with Massmart without the benefit of hindsight.

Edited by Peter DeIonno. With contributions from Dineo Matomela, Audrey D’Angelo and Samantha Enslin-Payne

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1.6 Gordhan adds budget muscle to growth plan

EDWARD WEST and LINDA ENSOR, Business Day, 24 February 2011

CAPE TOWN — Finance Minister Pravin Gordhan yesterday unveiled a budget to give financial muscle to the government’s new growth plan, allocating R150bn over three years for job creation, training and skills development.

These are the key objectives of the government’s New Growth Path policy. When it was released last year, there was some scepticism about whether the country could afford the investment required to generate 5-million jobs in 10 years.

But Mr Gordhan neatly aligned his spending plans with policy — without punishing taxpayers.

He reminded the National Assembly that he had to find almost R40bn to fund last year’s public sector wage deals, which hobbled his ability to spend this year.

Mr Gordhan said non-interest spending on public services would grow by an average of 8% a year, well above the projected inflation rate, rising from R897bn in 2010- 11 to R1,2-trillion in 2013-14.

The hallmark of this year’s R979,3bn consolidated budget is that it is slightly expansionary, with a slower than projected reduction in the budget deficit over the next few years — the only way Mr Gordhan can match funds to the African National Congress’s intention to address SA’s chronic unemployment.

The budget makes provision for a substantial unallocated contingency reserve of R4bn in 2011-12, R11bn the following year and R23bn in 2013-14.

Mr Gordhan said that this allowed for unforeseeable and unavoidable spending requirements next year and policy priorities over the medium term, which could include financing the National Health Insurance scheme. The proposed R5bn youth employment subsidy will contribute significantly to the suite of policies directed at achieving the growth path’s ambitions.

Infrastructure spending of more than R800bn by the government and state-owned enterprises over the medium term, R20bn in tax incentives for manufacturing investment, R73bn for the expanded public works programme and the R9bn jobs fund , all coalesce into a focused drive to boost economic growth.

In addition, a three-year allocation of R10bn for investment promotion will underpin the Industrial Policy Action Plan.

At a media briefing, Mr Gordhan said the focus on job creation was vital to address SA’s "chronic employment crisis".

To make a significant dent in unemployment, growth of 7% per year was required, which Mr Gordhan said remained a big challenge, but he added that there was "no silver bullet" for growth.

The government predicts real growth in gross domestic product of 3,4% this year, 4,1% next year and 4,4% in 2013. This compares with last year’s 2,8%.

Mr Gordhan allocated substantial amounts of the budget for education and skills training.

Further education and training colleges will get R14bn over the next three years, while m ore than R20bn will go to the sector education and training authorities and R5bn to the national skills fund. The National Student Financial Aid Scheme will get R6bn.

"Including adjustments for the remuneration of teachers, a total of R24,3bn will be added to education and skills spending over the next three years, which rises from R190bn next year to R215bn in 2013-14," Mr Gordhan said.

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2. South Africa

2.1 Alliance ‘likely to show united front at summit’

SAM MKOKELI, Business Day, 24 February 2011

MEMBERS of the tripartite alliance are expected to gloss over internal squabbles at their two-day summit, which starts today in Pretoria, and show a united front ahead of the local government elections.

This may be difficult since the differences between the African National Congress (ANC), the Congress of South African Trade Unions (Cosatu) and the South African Communist Party (SACP) — over policy decisions and the running of the alliance — are expected to feature on the agenda .

"The allies will proclaim (afterwards) that the alliance is in good health," said political analyst Aubrey Matshiqi yesterday. The "sharpening" of their differences so close to the elections, expected on May 18, would be avoided, he said.

Alliance members were tight- lipped yesterday on how they would approach the summit, which will be opened by President Jacob Zuma . However, campaign plans for the local government elections and the government’s New Growth Path policy document are expected to be discussed. Mr Zuma’s election as president of the ANC in 2007 was seen as a victory for the left , and was expected to improve relations between the ANC and its allies.

Mr Zuma’s predecessor, Thabo Mbeki , was accused by Cosatu and the SACP of marginalising them and ignoring the alliance.

But last year, alliance tensions spilled out from behind closed doors into the public arena, with the ANC and Cosatu clashes finding their way into the media, a sign that all was not well within the alliance.

The fractures in the alliance are twofold, with ructions between Cosatu and the ANC, as well as the federation and the SACP.

The alliance partners’ reception of t he government’s New Growth Path document last year highlighted the divisions . Cosatu criticised the proposals and claimed they were a continuation of the government’s previous economic policy — articulated in the Growth, Employment and Redistribution Plan , while the SACP endorsed it.

While the ANC and Cosatu differ on policy, the union federation and the SACP clash with respect to the ways they interact with the ANC and the ANC-led government.

Cosatu leaders feel the SACP is unable to criticise the government because its senior leaders hold Cabinet positions.

In fact, last year, Cosatu called for Higher Education Minister Blade Nzimande to resign from his government post and return to the SACP offices full-time, as he is also the party’s general secretary. Cosatu argues that Mr Nzimande’s deployment has weakened the party.

Similarly, Young Communist League head Buti Manamela also occupies a seat in Parliament.

Cosatu, on the other hand, has been very critical of the performance of Mr Zuma’s government and the prevalence of corruption.

This has driven a wedge between the two allies.

In terms of relations between Cosatu and the ruling party, the federation offended the ANC when it failed to invite it to a civil society conference last year at which the government was criticised.

The ANC accused Cosatu of starting a Zimbabwe-style union- based opposition movement to bring about "regime change" in SA.

Following this, ANC secretary- general Gwede Mantashe was booed by teachers at a conference of the South African Democratic Teachers Union, a Cosatu-affiliated union , when Mr Mantashe tried to raise the issue of last winter’s 21-day public service strike .

Yet despite the tensions and divisions — and with local government elections just around the corner — in two days’ time the allies are likely to emerge from the summit united — despite what went on behind closed doors.

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2.2 Matric: Umalusi reveals all … almost

KAMOGELO SEEKOEI AND RYAN HOFFMANN, M&G, 24 February 2011

The English home language question papers for last year's controversial matric exams had the highest failure rates of all the home language subjects because most non-English speakers who attend former Model C schools do not have the option of choosing their mother tongue as their first language.

There were also wild inconsistencies in the levels of difficulty across exam papers in the nine African languages offered as home-language subjects.

These startling findings emerged on Wednesday this week when the state's quality watchdog body, Umalusi, finally revealed details about its controversial so-called "standardisation" of the 2010 matric exams.

Applied every year, the standardisation process this time ignited greater public scepticism than usual because of the unexpectedly huge 7,1% increase in the 2010 pass rate of 67,8% -- up from 2009's 60,7%.

Umalusi’s press conference in Pretoria on Wednesday followed a month of increasing pressure for it to reveal more details about its standardisation -- in particular the subjects in which marks were changed, by how much they had changed and what the raw marks (that is, pre-adjustment) were.

The watchdog body was also facing a court challenge mounted by City Press and Rapport in January to divulge these details.

English had the highest home language failure rates
When the 2010 results were announced on January 6, Umalusi revealed merely that it had adjusted marks in some subjects. It did not specify which subjects or the extent of mark changes.

On Wednesday, Umalusi named 19 subjects whose marks it had changed. But it stopped short of saying what the raw marks were before its standardisation processes were applied to these subjects.

The subjects in which Umalusi changed marks were: Accounting, agricultural sciences, civil technology, consumer studies, electrical technology, English home language, English first additional language, geography, isiXhosa first additional language, isiNdebele home language, isiZulu home language, life sciences, mathematics, religious studies, seSetho home language, Setswana home language, Tshevenda home language, Xitsonga home language and Siswati home language.

"We have found that English home language has the highest failure rates of all home language subjects as most non-English speakers who attend former Model C schools are forced to take the subject as the schools don’t offer their mother tongue as home language subject," said Umalusi council chairperson Sizwe Mabizela at the conference. "So immediately these learners are at a disadvantage."

"Moves are also under way to ensure that all home language exams are brought up to the same level of difficulty. Currently there is just too much variability in these papers, particularly the African languages," he said.

Mabizela told the gathering that Umalusi was taking the unprecedented step of revealing its quality assurance and standardisation decisions to protect the integrity of the South African education system.

"In the absence of credible information from us, some so-called experts took the gap to peddle reckless and irresponsible commentary. Our failure to share this vital information with the public has the potential to damage the credibility of Umalusi and the qualifications which we assure," he said.

"It is in the interest of protecting our education system that we are taking this step."

'Ammunition to attack'
Mabizela added that Umalusi's mandate allows for the standardisation of raw marks "to ensure compatibility and consistency from one year to the next". Responding to a question at the press conference, Mabizela was adamant that any upward adjustments of marks would not automatically result in a pass mark because "pass marks are only determined once school-based assessments are added in".

Paddy Padayachee, acting director general of planning, quality assessment and monitoring and evaluation in the national basic education department, told the Mail & Guardian at the conference that the department had never doubted the integrity of Umalusi. He said the decision the reveal the adjusted subjects had demonstrated that there had not been any manipulation of marks.

Also at the conference, the secretary general of the South African Democratic Teacher's Union (Sadtu), Mugwena Maluleke, said the union had always had confidence in the standardisation process.

"Standardisation is a process that is done each year and there is always transparency on the part of Umalusi. Questions were only raised this year because of the improvement in the pass rate," he said.

He said they supported the decision to disclose the adjusted subjects now because if the process had been done haphazardly it may have "given people who did not have confidence in the education system ammunition to attack the education system".

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2.3 ANC commends Ndebele after toll outcry

The Star, 24 February 2011

Transport Minister Sbu Ndebele's “bold and progressive” step to suspend the toll tariffs in Gauteng were commended by the ANC on Wednesday.

“We fully share sentiments expressed by Minister Ndebele and Premier Nomvula Mokonyane, that while there is a need to boost transport infrastructure, it should not be done at the expense of the public or impacting severely on the cost of doing business in Gauteng or anywhere else in South Africa,” spokesman Jackson Mthembu said in a statement.

“We, indeed, are in agreement with the assertion by both our national and provincial governments that the improvement of our road infrastructure should not be a burden to those it is supposed to benefit Ä the road users.”

Ndebele's suspension of the tariffs on Tuesday followed a massive public outcry and a threat of strike action by ANC ally, the Congress of SA Trade Unions in Gauteng.

Concerns were raised over the lack of public transport in the province and the impact of the cost of the tolling system on the poor.

“The positive reaction by Comrade Sbu Ndebele to the public outcry over the introduction of toll tariffs in Gauteng, sets a good example of how an ANC cadre should deal with matters that impact on the people by listening to their concerns and acting in a manner that takes people's interests above everything else,” said Mthembu

He said the move should put to rest the public urge to stage protests against the Gauteng Freeway Project.

“To do so now would amount to jumping the gun as the inclusion of all affected parties has made the process representative of all views.”

Earlier this month, Ndebele said those who did not like the tolling system could use public transport.

There was a public outcry after the SA National Roads Agency Limited announced that motorists could expect to pay 66 cents a kilometre before discounts when travelling on the 185km route.

Motorists who purchased the e-tag system would pay 49.5 cents a kilometre, while medium-sized vehicles with the e-tag system would be charged R1.49 a kilometre. Heavy duty vehicles with an e-tag would be charged R2.97 per kilometre.

Motorists would get further discounts depending on when they used the highway and on whether they were frequent users.

Road users would not have to stop at a traditional toll booth, but would drive under gantries, fitted with electronic equipment and cameras. –

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2.4 Tycoon unshaken over R500m row

Kingdom Mabuza, Sowetan, 24 February 2011

Roux Shabangu will not part with the R1 million he promised should his R500 million police headquarters deal be found to have been improper

DESPITE the damning finding of the public protector against national police commissioner General Bheki Cele and Public Works Minister Gwen Mahlangu-Nkabinde, property tycoon Roux Shabangu will not part with the R1 million he promised should his R500 million police headquarters deal be found to have been improper.

But Finance Minister Pravin Gordhan yesterday said Cele might have to answer to the Police Ministry and Treasury for irregularities in the rental contract.

Speaking shortly before delivering his annual Budget, Gordhan joked that he had not yet studied the public protector's full report on the matter, as he was "preoccupied with a few other matters".

But he said it was a matter of principle that tendering processes must respect the law and the Public Finance Management Act and that those who failed to do so, must be held to account.

"We must establish the principle; the principle is that tendering processes must be in terms of the Constitution of this country and in terms of the Public Finance Management Act," Gordhan told a media briefing.

Public protector Thuli Madonsela said on Tuesday the contract Cele and Mahlangu-Nkabinde entered into with Shabangu was improper and unlawful.

Shabangu, who clinched the deal to lease the building to the SAPS, yesterday said he specifically made a promise to pay anyone who can bring proof to back up claims that he signed the lease agreement with Cele.

"I told the Sunday Times that I would pay a million rand to anyone if they can prove that I signed a lease with Bheki Cele," he said.

Shabangu said he was still willing to part with the money on condition that claims that he signed the lease with Cele were proven.

Cele's office said he felt vindicated by the findings of the public protector.

"The allegations were that he signed a lease agreement for this building," police spokesperson Nonkululeko Mbatha said.

"General Cele will now be consulting his lawyers to explore what avenues are available to him as he seeks redress over these allegations that have caused him and his family so much pain and suffering over the past five months or so."

Roux Property Fund spokesperson Makhosini Nkosi said the public protector's report would be referred to their attorneys.

Nkosi emphasised the lease agreement was still valid, binding and enforceable.

"We do not accept the findings of the report in so far as they constitute a repudiation of the lease agreement," he said.

The ANC defended Cele against calls from opposition parties that President Jacob Zuma should fire him.

ANC spokesperson Jackson Mthembu said it was opportunistic in the extreme for the DA and other opposition parties to call for the firing of the national police commissioner.

DA MP Dianne Kohler said her party's call for Cele to be dismissed was based on the principles of accountability and consequences for those who have been found to have erred by independent constitutional bodies.

The IFP called for the immediate resignation of Cele after the report found him guilty of improper conduct and maladministration.

"There should be no further discussion on this matter," IFP spokesperson on police, Velaphi Ndlovu, said yesterday.

"Cele acted unlawfully and improperly and should therefore resign or be asked to vacate his position immediately."

The Congress of the People called on Zuma to suspend Cele and other officials implicated in the tender.

"His immediate action will confirm his often stated commitment to fight corruption and would demonstrate his confidence in the office of the public protector," said spokesperson Sipho Ngwema.

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2.5 Transnet takes Gama back after successful appeal

JULIUS BAUMANN, Business Day, 24 February 2011

BARELY eight months after being axed, former Transnet Freight Rail CEO Siyabonga Gama has been reinstated to Transnet’s executive committee. He returned to work yesterday.

This brings to an end a long- running battle between the utility and Mr Gama , allowing new CEO Brian Molefe to focus on business.

Several parastatals, including the SABC and Eskom, have faced legal battles with senior executives in recent months.

Mr Gama’s reinstatement followed a successful appeal earlier this month against the outcome of his disciplinary hearing. This time he was found not guilty of corruption and dishonesty, his attorney Themba Langa said last night.

"My client was found to be not guilty of any fraud or corruption. He was guilty of mere negligence, which was not a reason to fire Mr Gama. He still has a great deal to contribute to Transnet."

Mr Gama will be based in the chairman’s office until Mr Molefe, who was appointed last week, finalises the make-up of his executive team. It was not clear last night whether Mr Gama would return to his position as CEO of Transnet Freight Rail, which is still vacant.

Mr Molefe said last night it was a relief to put the matter behind him, allowing him to focus on the running of Transnet.

"It is a relief not to have a lawsuit hanging over my head, as has been the case for Transnet in the past two years . Mr Gama has a wealth of experience and I believe that he has learnt his lesson. He will not make the same mistake."

Mr Molefe said he had not yet decided where Mr Gama would be deployed. He acknowledged that there were several senior posts vacant and he did not rule out Mr Gama returning to his old post.

Transnet said in a statement : "Mr Gama’s reinstatement is subject to a final written warning, given the fact that Mr Gama was not found guilty of corruption and/or dishonesty. The board is of the view that such an agreement is in the best interest of the company."

Mr Gama was suspended on full pay in September 2009 . He was alleged to have irregularly awarded an R18m contract to a firm linked to former communications minister Siphiwe Nyanda .

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