E-tolling creates jobs

The operations staff for the Gauteng e-tolling system will be 99% South African, according to transport minister Sibusiso Ndebele.

Responding this week to a parliamentary question about the e-tolling tender being granted to a consortium that is mostly foreign-owned, the minister said it can be reported that 99% of the Electronic Toll Collection (ETC) joint venture staff for the operations of the system will be South African.

“Furthermore, during the construction of the civil works, 20 000 direct jobs were created. This project has, therefore, contributed to job creation and will continue to do so.”

South African National Roads Agency (Sanral) awarded the contract for e-tolling implementation to ETC. The consortium comprises Swedish-based Kapsch TrafficCom and South African company Traffic Management Technologies (TMT).

Ndebele said the tender was awarded through a public process, taking into account the available skills in SA.

“An objective, inter alia, was to ensure that a quality product would be delivered.”

The minister added that due to the specialist technical nature of the systems, operations and the equipment proponents had to demonstrate their experience and capabilities to implement a project of this nature, including their financial strength.

“The equipment to be used, as well as the software for this type of toll system, is not locally available. However, local companies were not excluded from the pre-qualification phase as they brought their own unique knowledge to the table.”

Ndebele also said the process allows for the transfer of skills and the empowerment of South African companies.

He added that the contract requires the contractor to continuously transfer skills and ownership, and employ South Africans in all positions throughout the lifespan of the project. These requirements are monitored and the contractor will receive stiff penalties if failing to adhere to the requirements of the tender and commitments made.

“In this regard, it is recorded that Sanral required the foreign parent companies of ETC to put up guarantees in excess of R1 billion in support of their ability to perform their obligations in respect of this important contract, which is far in excess of that which could be offered by any South African company in this sector.”

The minister showed that of the consortiums that applied for the e-toll tender, ETC had the largest South African representation.

The Areya consortium had no South African stakeholders, ETC had 35% local ownership and Hamba Goli had 24.5% local representation.

TMT held 35% in the ETC joint venture, while the Kapsch group held 65%. However, Kapsch TrafficCom increased its share capital in TMT to 56.81% last year.

“This government has long since lost any idea of the ramifications of its policies on the small-business person and the public, and often seeks out overseas companies rather than looking for local opportunities outside of their close cronies,” says Democratic Alliance spokesperson on transport in Gauteng Neil Campbell.

Ndebele said a detailed tender evaluation process was followed, evaluating all aspects of the offer.

“The ETC joint venture submitted a compliant tender offer, and was more than R2 billion cheaper than the next lowest tender offer.”

For the design and construction of the toll system, operation service and asset replacement, ETC supplied a tender offer of R6.22 billion, Areya Alternative made one of R8.79 billion, Hamba Goli offered a tender valued at R9.02 billion, and Areya offered R15.29 billion.

“The contract has very specific measures and penalties to ensure that the contractor fulfils its contractual obligations,” said Ndebele.

Despite media reports that money from the system will be flowing out of the country due to the consortium being primarily foreign-owned, Sanral CEO Nazir Alli said this is not the case.

He said most of the money will stay in SA, because there's only direct purchase of technology that is not available in SA with the consortium. Money from the tolls will be used to pay off loans that were taken for the Gauteng Freeway Improvement Project.

E-tolling is an open road, multi-lane toll infrastructure that allows for tolls to be charged without drivers having to stop. There are no physical booths.

The toll tariffs were initially gazetted at 66c/km for standard light motor vehicles, and R3.96/km for heavy vehicles. However, large-scale public outrage resulted in the fees being suspended and consultation processes were started by the Department of Transport.

The estimated monthly revenue from e-tolling, based on current traffic flow and the proposed fee of 66c/km, is R300 million per month.

Live testing of the e-tolling system has begun, but the final implementation date is unclear.