Airline overspends by millions

Payments made to Phakalane Airways, the intra-Provincial flight service for government officials, has resulted in R11 million over-expenditure at the Department of Transport, Safety and Liaison. Total payments to Bevlink, the operators of the airline during the 2014/15 financial year, amounted to R17 million, while the actual seats occupied by passengers cost the department R1 million. The airline no longer flies commercially but still conducts chartered flights for state employees. The DA spokesman for Transport, Safety and Liaison in the Northern Cape, Pule Thole, was concerned that the department was acting upon instructions, following a cabinet resolution, to revive the airline that was costing taxpayers millions of rands. “During the annual presentation it came to light that government departments are being forced to make regular use of the airline, where they are committed to purchase at least four seats per week,” said Thole.

“The department has formulated a memorandum of understanding to legally oblige departments to make use of the airline. The Northern Cape departments of Health, Economic Affairs and Co-operative Governance, Human Settlements and Traditional Affairs have already signed this agreement.” The MEC for Transport, Safety and Liaison, Martha Bartlett, yesterday indicated the department would hold a press conference soon to discuss matters relating to the lease of their provincial office building, the funds from the Road Traffic Management Corporation (RTMC) and the intra-Provincial flight services. The Department of Co-operative Governance, Human Settlements and Traditional Affairs referred enquiries relating to the memorandum of understanding with Phakalane Airways to the Department of Transport, Safety and Liaison. Spokesman for the Ministry of Finance, Economic Development and Tourism, Lucky Chonga, stated that they were committed to protecting the public purse from corrupt officials.

“The Ministry will not tolerate any corrupt activities and if the allegations are true then the perpetrators should be dealt with by law enforcement agencies. “The Ministry does not support any fruitless and wasteful expenditure or any white elephant projects, hence we will be keeping a close eye on this project.” Spokeswoman for the Department of Health, Lulu Mxekezo, stated that they had not signed any agreement with regards to Phakalane Airway services. During the 2013/14 financial year, the airline was the cause of R3 million worth of irregular expenditure by the Department of Transport, Safety and Liaison. The department, in reply to questions in the Legislature, had explained that they had sought legal advice after incurring hefty bills, as departments were not utilising Phakalane Airways as they had expected. It was previously reported that state officials and MECs were refusing to make use of the airline due to safety concerns as well as the high costs of flights, with a round trip to Upington costing R5 072.94 and a return flight from Kimberley to Springbok costing R9 560.29.

“It is unfathomable that the provincial administration seems intent on continuing with this costly, unprofitable project, especially considering the tight economic climate in which the country finds itself,” said Thole. “Cost-cutting measures are being implemented and national Treasury is warning departments to tighten their belts, yet the Northern Cape government sees nothing wrong with squandering money on luxury travel, which is exorbitant in cost in relation to travelling by motor vehicle.” According to the annual report, the Department of Transport, Safety and Liaison incurred unauthorised expenditure to the value of R1 million, fruitless and wasteful expenditure to the amount of R428 000 (compared to R19 000 in 2014), and non-compliance legal disputes to the value of R1 million during the 2014/15 financial year. Irregular expenditure was understated by R56 million where payments were made in contravention of supply chain management processes.

The department, which was awarded a qualified opinion, had an initial saving of R10 million in transport operations, which constituted R3 million for the public transport operations grant and R7 million for learner transport. The savings were eroded by unauthorised expenditure of R1 million and unauthorised over-expenditure to Bevlink of R11 million. It was noted in the annual report that the department did not have an approved policy for transfer payments and the public transport and operations grant, while there were inadequate controls over the monitoring of public transport operators. Cope Member of the Northern Cape Provincial Legislature, Pakes Dikgetsi, believed that the annual report painted a “picture of a messy and dysfunctional entity”. “Blatant lies and deception is the modus operandi of this department. Mismanagement and irregular and unauthorised expenditure seems to be the order of the day. Sadly, there is no accountability and absolutely no consequences for this mess.”

Dikgetsi stated that learner transport was being compromised in favour of questionable dealings and luxuries. “We have consistently warned that the contract for office accommodation at the department’s headquarters is not in the interest of the department.”