Opinionista Wayne Duvenage 21 February 2013

Freeway construction collusion: Money back, please!

Recent revelations about collusion in the construction industry have implicated some of the companies involved in the Gauteng Freeway Improvement Project (GFIP), a matter which will certainly add to the already high levels of mistrust of the eToll plan.

Gauteng citizens are already angry about the South African National Roads Agency’s plan to toll its freeway upgrade, so to hear that the roads cost more than they ought to have is adding fuel to the flames of anger.    

Opposition to Urban Tolling Alliance (Outa) members are not surprised at these latest claims of price fixing and collusion related to GFIP road construction costs. One only has to look at the extent of increases of the GFIP construction cost figures (provided by Sanral in various documents) between 2004 and 2012, to feel that something was not right. This also prompts the question: How effective was Sanral when scrutinising for the best construction costs/ deals from its suppliers to the GFIP?

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South African citizens simply do not have to accept a 350% increase from original estimates of R4,5bn in 2004 which, incidentally, was noted for a 340km Gauteng Freeway upgrade in Sanral’s 2005 to 2008 declaration of intent. But even if one compares the final cost of R17,9 billion to the more recent figure of R6,4 billion, estimated by Sanral in 2006, the difference is still grossly unacceptable. In most private sector organisations, an increase to this extent on any sizable capital expenditure project would have executive managers packing for new jobs.  These exorbitant cost increases and the cloud of collusion surrounding the construction industry warrant a full independent inquiry into the entire costs of the GFIP which have, for too long, been shrouded in secrecy, high costs, blanked out pages, severe lack of public consultation and a general lack of transparency.

Of concern is Sanral’s silence regarding the exposure of pricing collusion by construction companies involved in the GFIP. One imagines that this revelation should have provoked the ire of the Sanral’s management and that all attempts would be made by them to have this matter thoroughly investigated, with the aim of retrieving the overcharged millions or billions of rands to reduce the long term debt for society. Unless Sanral provides a hard-hitting response to the collusive behavior of its suppliers, society will once again have reason to feel that Sanral does not have the best interests of the South African citizen at heart.

Has Sanral ever been ready?

While Outa’s legal challenge will see the matter heard in the Supreme Court later this year, Sanral is expected to launch eTolling of Gauteng’s freeways in the next month. Society is intrigued to see how this implementation will be undertaken, as it is now some two years behind the initial planned launch date of April 2011. Furthermore, in September 2012, the Constitutional Court ruling to set aside the interdict which then gave Sanral the green light to toll while the matter is being challenged in the courts. Sanral’s lawyers argued hard and loud that they urgently needed to start tolling and would begin to do so within two weeks of the interdict being set aside. Well, it’s nearly six months now and they have yet to start. Just another integrity blemish, while Sanral continues to blame Outa’s legal challenge for its inability to get started and its loss of revenue.

Fuel levy logic still ignored

What makes the entire decision to toll an even greater farce, is that, had a 10c per liter charge been added to the fuel levy back in 2006, when the plan for the GFIP was well under way, the authorities would have raised over R11 billion by now which, when combined with the R5,7 billion allocated by Treasury in 2012, the entire GFIP road capital costs would have been catered for today. What an incredible waste of time this has been. The real question is: What on earth can be so good about this unpopular, cumbersome, inefficient and expensive system that the authorities are so hell-bent on forcing it into being?

Outa’s funding

Outa expresses its gratitude to the thousands of citizens, families and businesses who have contributed to the R8,3 million raised to date. However, the alliance is well behind the “required batting rate” and needs to still raise the remaining R3,5 million required for current and expected legal costs through to the appeal in the Supreme Court later this year. Visit Outa’s website to donate. DM


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