Bandwidth in South Africa is quite expensive (see http://www.lowendbox.com/blog/vps-co-za-a-lowendbox-in-south... for a range estimate). I wouldn't be surprised if a sizeable chunk of the cost is estimates for bandwidth charges based on a serious over estimation of unique visitors. And perhaps a rounded up premium on the base price of each gig of bandwidth

Any "bandwidth cost" being a key part of the cost is likely a red herring.

It appears the IP address of the host (163.195.16.73) is owned by the SA government, so they are likely paying for bandwidth, not the contractor that developed the site. In my opinion this probably means bandwidth isn't part of the quoted cost. See http://www.afrinic.net and a DNS lookup for http://www.freestateonline.fs.gov.za/ - which is a CNAME for iproxy1.openet.gov.za. Of course I've not seen any contracts here or similar, so I could be wrong, but it's certainly how I'd expect the contract to be managed.

Regarding high bandwidth costs, the SA government has a significant stake in the monopoly telco provider (Telkom SA - http://www.moneyweb.co.za/moneyweb-corporate-governance/pic-... says it's 39.8% government owned).

My opinion is that bandwidth costs are high in SA because of the monopoly. There are some references/articles about this at http://en.wikipedia.org/wiki/Telkom_(South_Africa)#Criticism...

So even if the costs are high, it doesn't really matter to the Government - they are getting 39.8% of the costs back from their other investments - it's just the rest of the technology sector that suffers.

Oskar