A ghost Container Park and empty sites where others should have been erected for Small, Medium, and Micro-sized Enterprises (SMMEs) are symbols of the mismanagement of Local Economic Development (LED) funds in some Free State towns. BizNews speaks to Irene Rügheimer, a PR Councillor for the Democratic Alliance (DA) in Dihlabeng in the Free State. She reveals the reasons for this, the challenges faced by the municipality – and the profound impact on the local communities. It is a tale of unscrupulous tactics to abscond with funds; unfinished projects; lack of accountability; the urgent need for reforms; and a glimmer of hope amongst all these challenges. – Chris Steyn
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Relevant timestamps from the interview
00:00 – Introductions
00:35 – Irene Rügheimer on the ghost container park saga
01:49 – Rügheimer on the dangers of paying upfront to service providers
03:49 – On the lost benefits of the ghost container parks
04:20 – On steps taken to rescue the container projects
05:42 – On the service providers absconding with funds
06:14 – On how long the container park has stood desolate
06:39 – On the importance of local economic development projects
07:22 – On if there are any examples of successful projects
08:43 – On where government spending goes
09:28 – On how much money has been lost of failed projects
09:44 – On being helpless to take action
11:04 – On hope for improvement
11:45 – On changing the payment structures of projects in future
12:27 – Concludes
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Highlights from the interview
The tale of abandoned container parks
Four million rand was allocated for the establishment of container parks in five towns – Dihlabeng (Bethlehem), Clarens, Fouriesburg, Roosendal, and Port Roux. The Bethlehem Container Park was never finished. The others were never begun – despite R3.1 million paid to the contractors.
Read more: Cyril! Clarens is calling….
Unravelling the root causes
A recurring pattern of mismanagement afflicts not just the container park projects but various other initiatives in the municipality. Contractors are often paid upfront, only to abscond with some claiming insolvency. This has led to numerous drawn-out investigations by the municipality, the details of which are often not obtainable. That raises questions about transparency and responsibility.
Unscrupulous tactics to abscond with funds
The issue of upfront payments to certain service providers raises concerns about unethical practices as this often seems to involve favouritism where those with personal connections receive payments upfront, often leading to the abandonment of projects with no accountability in sight.
Unfinished projects and accountability
The lack of completed projects and the failure to account for disbursed funds has left the community in a state of disarray. The Vogelfontein school project, intended for the township, is a prime example of the funds being paid over with nothing tangible to show for it.
The impact on small and medium enterprises
The fallout from these abandoned projects is disastrous for SMMEs. Each container park was meant to accommodate six SMMEs, along with the employees they would hire, benefiting many families and the local economy. The failure of these projects has left these entrepreneurs without opportunities for growth and development.
Read more: Mailbox: Thank you from a tranquil village disturbed – the unruly arrival of Chris Steyn and the impact on Clarens
The urgent need for reforms
To address these challenges and prevent further losses, immediate reforms are necessary within the municipality. Implementing accountability measures, such as performance agreements, and putting an end to upfront payments to service providers, will be pivotal in ensuring successful local economic development initiatives.
Hope amidst challenges
Despite the dire situation, Irene Rügheimer remains hopeful. With the appointment of a permanent Municipal Manager (MM), the potential for greater accountability and improved governance emerges. However, this also hinges on appointing directors who can be held accountable, and setting performance standards for future projects to ensure their success.
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