Western Cape Business News

Send  Share  RSS  Twitter  05 Nov 2009

DEVELOPMENT: IRT Cost Escalations Explained


Recent Western Cape Business News

The cost escalations in the IRT project are not due to any corruption, financial maladministration or fraud.

The problem resides in an initial significant underestimation of project costs. The problems that have arisen are due to inadequate project management and reporting of cost escalations. Significant corrective interventions were carried out as soon as problems became apparent to bring the project back on track.

Due to the checks and balances within the City’s administration, as soon as the problem was identified the City launched a forensic investigation to ascertain the reasons for the escalation, the underestimates, the process, expenditure and who was responsible for what.

The independent forensic team found that there was no evidence of fraudulent activities.

It is important to state that as soon as these problems were identified immediate action was taken to address the problems regarding the management of the project and the escalating costs.

A dedicated project team has been appointed under Mike Marsden, Executive Director: Service Delivery Integration. A strategic review of the IRT project is underway to ensure that the project is rolled out in a financial affordable and viable manner.

The project continues and its implementation will match available funding.

The IRT project is a joint project between national government and the City, with national government providing the majority funder of this project. In implementing this project the City has and will continue to work closely with national government. It must be stressed that no undue burden will be placed on the ratepayers of Cape Town as the IRT project will only spend money that is made available to the City through the Division of Revenue Act by national government.

The City of Cape Town is dedicated to implementing a quality public transport system, but needs to be financially prudent in the current constrained economic climate. This remedial action is expected of good governance.

The City will ensure that Cape Town provides the transport services required by FIFA for the World Cup event, which includes:

  • An inner city circulatory service

  • A match day shuttle service to the Cape Town Stadium

  • An airport to city centre shuttle service

Once the City has met its host city obligations the project will be implemented in the rest of the Phase 1a area according to available funding.


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