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Sanral, Outa at it again

Admire Moyo
By Admire Moyo, ITWeb's news editor.
Johannesburg, 07 Feb 2017
Outa alleges Sanral inflated the price of the GFIP to the tune of up to R10 billion.
Outa alleges Sanral inflated the price of the GFIP to the tune of up to R10 billion.

Old foes the South African Roads Agency Limited (Sanral) and non-profit civil action group the Organisation of Undoing Tax Abuse (Outa) are at it again. This time the adversaries are fighting over the costs of the roads agency's Gauteng Freeway Improvement Project (GFIP).

In a statement issued yesterday, Outa alleged Sanral inflated the price of the GFIP to the tune of between R9 billion and R10 billion.

It also issued a paper titled "The Road to Excess: A Paper on High Pricing, Collusion and Capture of National Road Construction". In this paper, Outa says it goes broader than a benchmarking exercise to expose the extent of the exorbitant inflation of the GFIP cost to society.

Outa says it engaged with experienced industry experts - road construction engineers and quantity surveyors - and conducted a range of price estimation methodologies to arrive at its "fair value" price-tag for GFIP.

This was made possible by using tender documents of one of the work packages it obtained, as well as other key quantity details and significant input obtained from a number of GFIP presentations given by Sanral and the construction companies between 2008 and 2013.

Benchmarking evidence

The organisation says it also gathered more information on other road construction projects - internationally and closer to home - which offered further benchmarking evidence pointing to an excessively inflated price of R17.9 billion paid by Sanral for the GFIP.

In February last year, Outa issued a similar report, which Sanral dismissed, saying it sent Outa a list of hundreds of questions and requests for clarifications based on the organisation's 29-page "position paper".

Now the civic body says it reiterates its opinion that the GFIP has been overpriced. Using more accurate information, Outa calculates the price of the project to be between R8 billion and R8.7 billion, resulting in an estimated overpayment to the tune of between R9 billion and R10 billion for this project, it notes.

"Outa would still like to obtain the full tender documents and conduct a detailed and accurate costing exercise of the GFIP; however, until that takes place, we believe in our analysis and conclusions," says Ben Theron, Outa's transport portfolio director. "The mere fact that information pertaining to the tenders of the GFIP are not easily accessible to the public - when compared to the availability of other road construction projects undertaken by Sanral - suggests Sanral is trying to hide something here."

Following the release of this position paper, this week Outa will be writing to the ministers of transport and public enterprise to seek their intervention and commitment to introduce a commission of enquiry into the excessive costs pertaining to the GFIP, among other issues.

'Rehashed report'

Meanwhile, Sanral has rejected Outa's "rehashed 'research report' on alleged collusive practices on its Gauteng Freeway Improvement Project, but this time the cost was R1.2 billion lower than their estimate release in 2016".

"Outa - again - compares projects that are incomparable and compounds this basic error by generalising complex engineering projects which international experts, including those in their own examples, warn against," says Vusi Mona, Sanral's head of communications.

The roads agency says the premise that there is a single or specific unit cost for road construction is a fiction. The costs of road construction differ widely depending on a multitude of factors, it notes.

This is not the only issue where Outa has been less than forthright with the media and their constituents, says Sanral. "Outa alleges they were not given access to the information they sought. The fact is that Sanral subscribes to PAIA (Promotion of Access to Information Act) and Outa was, through a letter, given full access on 15 July 2016. It has to date not taken up this offer," says Mona.

"It is important for us to move forward with road expansion in Gauteng to prevent debilitating congestion in the near future. To do so, we want to engage with provincial and municipal infrastructure, and also with the likes of the AA and Outa.

"Sadly, the only call you ever hear is for the e-toll scheme to be scrapped. This would mean that we would not able to meet our financial obligations and that we may be liquidated. This could affect all other infrastructure entities within government," says Mona.

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