The Organisation Undoing Tax Abuse (Outa), previously known as the Opposition to Urban Tolling Alliance, said on Monday that research had shown that the South African National Roads Agency Limited (Sanral) had overpaid for the first phase of the Gauteng Freeway Improvement Project (GFIP) by 321%.
Outa noted that taxpayers had been overcharged by R11-billion for the first phase of the GFIP.
The organisation released a report on Monday comparing the costs of the GFIP project to that of other road construction projects around the world.
“Following years of questioning the seemingly high costs of the GFIP, Sanral has continuously disregarded the matter as a nonissue,” said Outa chairperson Wayne Duvenage.
Outa’s report had benchmarked the GFIP costs against 11 case studies.
“The research went to lengths to ensure that we compared like with like,” he noted.
He said Outa had factored in conversions from miles to kilometres and applied the rand exchange rates applicable in 2010, when the bulk of the GFIP project was nearing completion.
The organisation also added in year-on-year inflation rates at 7% and converted all studies in lane kilometre widths to that of a ‘centerline’ length per kilometre costs and reflected the average number of lanes on the GFIP project to nine lanes.
“We also only compared the pure road construction cost elements of the GFIP, leaving out the costs associated and estimated to the GFIP interchanges, median lighting and bridgework, so as to ensure the exercise was as close to the actual GFIP project as we could possibly get.”
Duvenage said its comparisons showed there was something “grossly wrong” with the cost of road construction under Sanral’s watch.
He added that Outa’s own research and assessment had generously pitched the GFIP cost at being no higher than R7-billion, which was lower than the earlier estimates of the project in 2015 at R18.8-billion.
In a statement released by Sanral on Monday, spokesperson Vusi Mona said Sanral would not be able to respond to the statements made by Outa until it had seen the research.
“Once the report has been presented and we have been afforded time and an opportunity to study it, we would be better placed to respond,” he said.
Mona added that Sanral had commissioned its own process of quantifying the damages it suffered and would not place reliance on Outa’s figures because Sanral did not know how Outa arrived at the figures presented in its report.
“We would also need to be sure that the report was compiled by a credible institution or person where the facts are supported and the figures verified. Until then, we really cannot respond meaningfully to the allegations,” he said.
Duvenage noted that the outcome of this research had serious consequences for Sanral.
“It raises the question of what the decision by former Transport Minister Jeff Radebe would have been, had the road construction costs come in at around R7-billion.
“There is no doubt that, at this realistic cost, the bond repayment would have been substantially lower at well below R1-billion a year,” said Duvenage, adding that this was significantly lower than the e-toll administration and collection charges, which were over R1-billion a year.
He noted that, at these costs, the entire justification for the e-toll project would be ruled as grossly irrational and now gave the motoring public more justification to defy the scheme.
On the basis of this research, Outa was calling on Transport Minister Dipuo Peters to consider Sanral’s acceptance of such high road costing as a serious problem for the public, and it was arguing for a thorough and independent investigation to get to the bottom of these concerns.
Duvenhage called for all future contracts, and bills of quantities and pricing for all road projects, in South Africa, to be conducted in an open and transparent manner.
“The Gauteng e-Toll scheme must be cancelled and Sanral must abandon its plans to toll the Western Cape freeway project,” he said.
Outa has expanded its areas of interest to include what it believed were irrational taxes such as government’s proposed carbon tax, waste recycling tax, State-owned entity Eskom’s electricity tariff increases and whether or not there was a real perceived need for more nuclear power in South Africa.