'ANC, e-toll link misleading'

The African National Congress (ANC) denies claims that it is linked to Gauteng e-tolling profits.

Responding to media reports that say the ruling party is set to profit from the controversial system, national spokesperson Jackson Mthembu says the articles are extremely misleading.

“There is no e-tolling that is linked to the ANC. It is individual people. The ANC is not linked to e-toll profits.”

Democratic Alliance (DA) Gauteng caucus leader Jack Bloom has called on the SA National Roads Agency (Sanral) to disclose all 33 sub-contracts involved with the Electronic Toll Collection (ETC) consortium that will be running the e-toll system.

“This is after disturbing reports about ANC links to companies that will benefit from the e-tolling.”

Reports say ETC has only disclosed nine of the 33 sub-contracts. This includes catering company Tsebo Holdings, which is 15%-owned by Nozala Investments and 15% by Lereko. Nozala is headed by Salukazi Dakile-Hlongwane, a trustee of ANC front company Chancellor House, and Lereko is owned by former environment minister Valli Moosa and Chancellor House trustee Popo Molefe.

“Another company is Gijima, which is 35%-owned by well-known ANC backer Robert Gumede, which was awarded a multimillion-rand contract to design and run the entire IT system for the project,” says Bloom.

Gijima confirms it is one of the 33 sub-contractors, and is supplying and implementing all computer hardware infrastructure (servers, storage, network and end-user equipment) for the Gauteng Freeway Improvement Project, for which e-tolling was created.

“Due to the confidentiality agreement between Gijima and ETC, the value of the contract cannot be revealed,” says the company.

“Sanral and ETC have stymied DA attempts to obtain details of these sub-contracts. In September last year, the DA submitted an application under the Promotion of Access to Information Act (PAIA) to both Sanral and ETC to disclose full details of the tolling contract. They have told us that this cannot be done as there are confidentiality agreements with all the sub-contractors and their agreement needs to be obtained for any disclosure. Why all the secrecy on contracts paid with public money?” says Bloom.

He adds that this feeds all sorts of speculation that needs to be put to rest, including a possible link to an arms deal company.

Bloom also says he has received acknowledgement from the office of public protector Thuli Madonsela, concerning his referral of the toll contracts for investigation. “It is vital that this investigation goes ahead so that we know the truth about who benefits from these controversial contracts, and whether there was any corruption.”

Cabinet has appointed a committee to be chaired by deputy president Kgalema Motlanthe to coordinate all work around the GFIP.

Other members of the committee are the ministers of transport, finance, public enterprises, and performance monitoring and evaluation.

“This committee will, among other things, move with urgency to ensure that Sanral's financial stability is not affected in any way. The committee will assess the government's response to the North Gauteng High Court ruling and other related legal matters. It will also meet with appropriate stakeholders in order to find constructive solutions and consensus on the outstanding matters.”

Cabinet says the decisions government makes regarding the future of the GFIP will have serious implications for how SA finances future infrastructure projects. “We must also guard against decisions and actions that may impact negatively on our track record in the prudent management of government finances. Government has to act responsibly, ensure that it and the state-owned enterprises honour their financial obligations timeously.”

Moody's Investors Service on Friday downgraded Sanral's ratings, in light of the e-toll issue. Its global scale, local and foreign currency issuer ratings downgraded to Baa2/P-3 from Baa1/P-2; and its South African national scale issuer ratings downgraded to A2.za/P-2.za from Aa3.za/P-1.za.

“The rating action follows the North Gauteng High Court's decision on 28 April 2012 to block the implementation of electronic tolling... pending a final court resolution on the matter. The delay in GFIP e-toll collection adds pressure on Sanral's finances and raises concerns over its medium-term financial sustainability," says Kenneth Morare, Moody's lead analyst for Sanral.

So far, the delayed implementation of e-tolls has resulted in revenue losses of approximately R2.7 billion for Sanral. “These losses will grow by an estimated R100 million each month that the delay continues and will gradually erode the company's cash buffer.”

Moody's says the negative outlook reflects Sanral's weakening financial conditions over the medium term and the inherent operational risks associated with the e-tolling system and concerns over SA's deteriorating operating environment, as reflected by the negative outlook on SA's A3 government bond ratings.

Democratic Alliance shadow minister of finance Tim Harris says finance minister Pravin Gordhan must answer questions on the fiscal impact of e-toll debts.

“The result from the delay in Gauteng's e-tolling will have important implications for South Africa's fiscal policy, the funding of infrastructure, and National Treasury's influence in government.”

He explains that from a fiscal policy perspective, if National Treasury has to provide a backstop of taxpayers' money for all of Sanral's debt, there will be a material effect on the fiscal framework and key debt-to-GDP numbers. “This will also raise questions about whether all debt issued by state-owned enterprises should be regarded as contingent liabilities for the national fiscus.”