Stopping the Rot

The past decades are littered with an array of botched decisions by government or government services which have cost tens of billions of Rupees to the State. No lessons seem to have been learnt. This cannot go on

By Mrinal Roy

The signs are not good. The whopping compensation of Rs 5.7 billion that government had to pay out to Betamax in compliance with the ruling of the Privy Council should have been a jolting wake-up call for the political class and the political leaders across the political divide, party and responsible for this costly blunder. This is far from being the case.

The past decades are littered with an array of botched decisions by government or government services which have cost tens of billions of Rupees to the State which have had to be borne by the people. These inter aliarelate to the hedging fiascos of Air Mauritius and the State Trading Corporation during the 2008-2014 period, the BAI debacle triggered in April 2015, the cost overruns of the Midlands Dam project and the Terre Rouge-Verdun link road, the questionable Rs 19 billion Safe city project whose deliverable benefits remain elusive or the Rs 5 billion Cote d’or multisport Complex as well as the skeletons in the cupboard of the emergency government procurement tenders, etc. The list goes on and on. No lessons seem to have been learnt. This cannot go on.

‘Après la mort, la tisane’

Instead, the government has announced the setting up of a commission of inquiry again at public expense to basically settle its political scores when the country and the people already know that most of the leaders of the main political parties were directly party to the key decisions of the Betamax saga costing Rs 5.7 billion of public money either at the time of the approval of the 15-year contract in November 2009 or its termination in January 2015 or in both instances. Against such a backdrop, what would such a commission of inquiry achieve, the more so as the outcome of previous commissions of inquiry and the selective application of their recommendations are flagrantly tell-tale? It all terribly smacks of the adage Après la mort, la tisane’.

In a country where the 2021-22 GDP is estimated at approximately Rs 500 billion by the Minister of Finance, every billion Rupees matters especially at a time when we need every Rupee available to grapple with the daunting health and socio-economic challenges of Covid-19 exacerbated by the surge and disastrous fallouts of the extremely contagious and deadly Delta Covid-19 variant. According to the World Bank, ‘Mauritius’ Covid-19 response since the outbreak already amountsto 32 percent of our GDP’ and counting.

Rampant ineptitude

The tens of billions of rupees of public money irresponsibly squandered over the past decades through costly blunders by successive governments and state institutions manned by political appointees and the coterie should also have been an eye-opener that the current system of governance and management of the affairs of the state as well as the culture of opacity and spin doctoring to mask systemic failures are the root causes of the rampant ineptitude.

Such partisan appointment policies at the expense of meritocracy have spawned incompetence and botched decisions by state institutions, state owned companies and undermined the efficient management of government services. The upshot is that billions of Rupees have also been lost in risky loans granted to foreign companies at the State Bank and tens of millions of Rupees have been placed by government institutions and companies such as municipalities, the Mauritius Housing Company and the National Insurance Company in a new bank which is now in receivership. Such appalling governance cannot go on.

The Supplementary Appropriation bill submitted last week for approval in the National Assembly covering an additional Rs 23.6 billion is a tell-tale mirror of the state of patent ineptitude among state institutions. It not only includes a grant of Rs 4.6 billion to the State Trading Corporation to enable the Corporation to settle its liability towards Betamax following the Privy council ruling but also a sum of Rs 2.3 billion – all paid from public funds to writeoff outstanding loans ranging between Rs732.8 million and Rs 5.7 million of more than eight government institutions such as the Central Water Authority, Polytechnics Mauritius Ltd, the Wastewater Management Authority, the National Transport Corporation or the Mauritius Broadcasting Corporation, etc.

Scathing indictment

In such an unseemly context, no wonder, even the Bank of Mauritius has also been rapped on the fingers by the International Monetary Fund and unequivocally asked to ‘refrain from providing direct financing to the government and engaging in quasi-fiscal activities and advised reforming the Bank of Mauritius law, including to preempt further exceptional transfers to the government.’ The IMF ‘also recommended that the central bank be recapitalized and relinquish ownership of the Mauritius Investment Corporation (MIC), with the financing of the MIC provided through the budgetary process.’ No amount of spin doctoring can hide this scathing indictment.

In a context of strapped public finances, the recent 2021-2122 budget announced ‘an unprecedented 3-year National Flood Management Programme to the tune of Rs 11.7 billion managed by another government institution, the Land Drainage Authority covering some 21 major projects spread over the different constituencies of the country costing between Rs 1.5 billion and Rs 224 million. This national programme, proposed in the wake of the recent flash floods which afflicted the southeast of the country, begs so many questions. Have thorough technical studies been carried in the various project locations to fathom the dynamics of water flows, the root causes of flooding or the bottlenecks to the natural flow of water such as concrete buildings, new roads or unauthorized constructions, etc., before designing and investing in efficient solutions to resolve the flooding problem? Stop-gap measures waste scarce public funds and prolong the hardships caused to people.

Bottom line

The bottom line is that the current style of governance, mode of appointment of heads of key institutions of the state and state owned private companies and the management of the affairs of the country are systemically flawed. These are adversely affecting the prospects of the country and are untenable. They are also costing billions of Rupees of squandered public money to the nation which the country cannot afford.

As a nation, we therefore urgently need to stop the rot.

We must realize that we operate in a very competitive world. If we are to succeed, we need first and foremost to recast and get our act together to adapt to the tech-driven Covid-19 market reality. Covid-19 offers new opportunities as the pandemic has disrupted supply lines and severely constrained the production and supplies of a wide range of products.

The ultimate responsibility of costly blunders lies with the political leaders heading the government. If we are to stop this costly hemorrhage of public funds, we need new political leaders and politicians driven by lofty ideals, altruism and having the competence and management acumen to take sound decisions and judiciously and rigorously manage the affairs and finances of the country in an accountable and transparent manner to ensure that the country obtains full value for every Rupee spent.We also need to urgently assure that all key institutions of the state and state owned companies and the top echelons of the government Establishment are manned by competent and highly qualified professionals and cadres chosen through a transparent merit-based recruitment exercise.

A viable future

Hobnobbing and powwowing with the private sector whose investments in the country are heavily skewed towards the lucrative real estate development projects on their prime land assets is not a viable way forward for the country. Instead, we need to overhaul our economic model and position the product and services offer of the country with new economic actors and foreign investors having the business acumen and expertise requiredtowards high value-added activities and upmarket services in a wide range of carefully identified sectors in principally the services sectors which boost growth, employment, living standards, bridge inequality and have a positive multiplier effect on the economy at large.

The status quo is certainly not a viable option for a better future.


* Published in print edition on 9 July 2021

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