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Big scramble to get all 2010's eggs in one basket
November 4, 2009
With up to half a million well-heeled tourists due to visit South Africa next year for at least five weeks during the World Cup, food and drink suppliers can expect a boom.
It is estimated that these visitors will eat more than 30 million meals over a five week period, mostly benefiting hotels, restaurants and fast food outlets and their suppliers.
Breakfast alone for these hungry fans will require about 116.5 million tons of cereal, 93.2 tons of bread, almost 70 tons of bacon, 4.7 million eggs, 311 777 litres of milk and 116 510 litres of yoghurt.
This of course is over and above what South Africans will eat while the tournament is on. For example, residents are likely to eat about 12.5 million eggs, based on a rough estimate of egg consumption using 2007 data from the International Egg Commission. This does not include eggs used in processed food.
So not only does South Africa have to ramp up production, but it has to get food supplies to restaurants, hotels and fast food outlets at the right time and in the right quantity.
It also means that food safety standards need to be strictly adhered to, so that a boom does not turn out to be a bust.
DuPont has warned that South Africa needs to have proper systems in place to test food quickly and accurately as the cost for producers of recalling a product and losing production time can be high.
A 2006 study by Washington State University estimated the cost for contaminated product recall is $540 000 (R4.2 million) but it can be as high as $7m. The average cost of litigation for a contaminated product is $200 000.
That is not to mention the unquantifiable cost to South Africa's reputation if a whole lot of tourists come down with food poisoning.
Toys for the boys
Communications Minister Siphiwe Nyanda perhaps got it into his head back in the days when he was the first black head of the SA National Defence Force that problems could be solved by throwing other people's money at them.
A few years later, the interplay between international arms dealers and local politics jolted South Africa out of its post-1994 reverie.
But up until then, if you needed a few extra toys for the boys, why not splurge R21 billion on a few dozen fighter jets, helicopters and submarines?
That figure has since grown to more than R60bn, but that is beside the point - which is Nyanda's largesse with taxpayer's money. Since his appointment to the cabinet this year, he has solved his transport woes with an injection of taxpayer's funds towards the R2.4m purchase of two BMWs.
Now his department is proposing to solve our public broadcasting woes with a hike of up to 1 percentage point in income tax to fund the SABC.
The draft Public Service Broadcasting Bill, released for comment last week, proposes the scrapping of TV licences in favour of funding directly from personal income tax.
To be sure, the public broadcaster needs quite a bit of help - the bailout required is estimated at around R2bn.
The government has come to the party (sort of) with an allocation of 10 percent of that amount announced in last week's medium-term budget policy statement.
Allow us the temerity to suggest that instead of picking on taxpayers, who have lots of other causes to fund and certainly more noble ones, Nyanda might consider approaching his old business colleague, Fana Hlongwane, allegedly a central figure in the multibillion-rand arms deal, for a slice of funds to keep the broadcaster afloat.
Two years ago it was disclosed that Hlongwane, formerly special adviser to the late ex-defence minister Joe Modise, was under investigation by the UK's Serious Fraud Office for allegedly receiving arms deal commission payments totalling at least R280 million.
Lack of accountability
Anyone who hopped onto the interim SABC board in the hope of getting access to yet another government-funded gravy train will be bitterly disappointed by now. Just four months into their temporary sojourn and they are no doubt weighing up the not-inconsiderable costs they might have incurred.
This has been as close to a full-time job as you can get; and, by all accounts, it has been a tough full-time job. It is hardly likely that in the five or so months of its existence - it is due to hand over to a full-time board at the end of November - that the interim board will have sorted out the mess that is the public broadcaster.
But it appears to have made considerable progress in identifying the problems that need to be addressed. Lack of accountability appears to be a major one and related to this is the fact that senior executives don't have measurable performance contracts.
To date this has meant that the top guys at SABC have been enjoying bonus payments even when the broadcaster has not been making any profit.
According to the interim board, for the year ended March 2009 SABC made a loss of R910m and it is currently operating on an overdraft of around R600m.
The extent of the losses is expected to reduce in the years between now and 2012, when a profit is expected.
Meanwhile it is to be hoped that cost-cutting efforts by the interim board will be reinforced by the permanent board when it takes over. Such efforts include restrictions on business class air travel. In just three months of this discipline SABC has saved R8m in air travel costs.
Talking of economising on air travel, yes indeed that was our very own Minister of Finance, Pravin Gordhan, seen in economy class on the Johannesburg to Cape Town flight yesterday morning.
Edited by Peter DeIonno. With contributions by Samantha Enslin-Payne, Ingi Salgado and Ann Crotty
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