Outa out to nail Sanral

The Organisation Undoing Tax Abuse (Outa) has promised to publish a report which will confirm that the Gauteng Freeway Improvement Project (GFIP) was grossly overpriced.

Speaking at a media conference held at Outa’s offices, Randburg Outa chairperson, Wayne Duvenage said, “We are still doing research and we need additional information from researchers and legal teams [which we will get] in few weeks time. We will release a damning report that will reveal that the South African National Roads Agency Limited (Sanral) inflated the price of road construction in the GFIP.”Duvenage said the public view about Sanral will change after seeing the report.

The chairperson said, “Thus our position remains an international benchmarking exercise using credible case studies. The GFIP project appears to be overpriced by 321 percent; and if we use Outa’s localised estimates of the GFIP project cost, the project still appears to be grossly overpriced by at least 152 percent and that is R10.8 billion, excluding the e-toll-related expenses.”

Duvenage also said that as a result of Sanral’s questioning and futile attempts to vilify Outa’s position paper, Outa has conducted additional research into comparisons with local road construction costings.

“At this stage of our deeper research, we can confirm that more damning information has come to the fore, which will further substantiate our claim that the GFIP project has been significantly overpriced. We will reveal this research in an updated version of our position paper within the next few weeks,” he said.

Duvenage said Outa’s report compared 11 credible case studies, adjusting variables to assess a variance of these costs and that of GFIP. The average of those 11 comparisons was 321 percent.

“This is not an error, this is our position and we stand by our rationale used in this paper. Outa then calculated separately what it perceived the GFIP project might have been, using publicly available data, costs etc.”

Duvenage revealed that on 18 November 2013, the Competition Commission Tribunal ruled that Sanral and others take action and recover costs pertaining to the unlawful collusive company actions. “By June 2014, seven months later, Outa had still not seen or heard of any significant action being taken in this regard. On 11 June 2014, Outa wrote to Tembakazi Mnyaka, the chairperson of Sanral’s board at the time, inquiring feedback as to what action was being taken on 14 August 2014,” explained Duvenage.

“Outa received a curt response from Sanral lawyers dismissing their need to provide Outa with the feedback sought.”

He added that on 23 June last year, it was reported in the media that Sanral was to sue construction companies. The report quoted Sanral CEO Nazir Alli as saying that the amount in damages it was suing for had not been determined but said they were going to have a civil claim against them, hopefully by the end of June last year.

Duvenage added that on 26 August last year, in a media statement released by Sanral, Vusi Mona said, “As for Outa’s call for Sanral to account over the collusion matter, the agency remains the only organisation that has opened a criminal case against construction companies that were named by the commission to have colluded during the tendering processes.”

Duvenage said independent experts are currently calculating the extent to which Sanral overpaid because of collusion between construction companies. “Outa’s concern is when is Sanral actually going to be transparent, with full details of this action to claw back the overcharges from the collusive practices,” concluded Duvenage.