Antoinette Slabbert
3 minute read
5 Nov 2013
6:00 am

E-toll company already earning R25m a month

Antoinette Slabbert

Sanral is paying R25 million a month on average to toll operator ETC for "costs incurred" as it prepares to implement Gauteng's e-toll system.

FILE PICTURE: An E-tag pictured at The Citizen Offices, 04 November 2013.

Alex van Niekerk, Sanral’s head of tolls and tariffs, told Business that ETC – 85% owned by Austrian company Kapsch – had been submitting monthly invoices for direct costs like rent, rates and taxes.

Other services were paid for at a tariff agreed upon in the contract with the service provider. ETC submits a certificate for work done. Once it is verified that the work has indeed been done, payment is made at the agreed upon tariff.

Van Niekerk said Sanral had reached agreement with the Gauteng Department of Community Safety that the enforcement of e-tolls would be done by their officials and not the Tshwane and Johannesburg Metro Police or the Road Traffic Management Corporation”s National Intervention Unit. Van Niekerk stressed that ETC was also a South African company: “They pay tax in South Africa and 99% of their staff is South Africans.” He said the criticism that huge amounts of toll revenue would leave South Africa through Kapsch was unfounded. “Kapsch will only get dividends if ETC makes a profit.”

The contract with ETC stretches over five years from the start of e-tolls, after which it will be put on open tender again.

With e-tolls set to commence before the end of the year, that means the contract may be up for grabs by 2018.

Many South African operators also had the capacity to take over this function, Van Niekerk said.

The current payments relate to, among other things, e-toll outlets in major shopping centres that have seen few customers while the implementation has been delayed.

Van Niekerk stressed that the contract with ETC was not a concession; they were service providers. “It is like somebody who provides garden services and you pay for those services.” The contract does not provide for claims by ETC against Sanral due to the delay in implementing e-tolls.

He said the contract included the design, build, maintenance and operation of the e-toll system. “That is the best contract format for systems. If you use one contractor to build it and another to operate it, problems during operations can easily be blamed on the party who built it.” A contractor, who builds and operates it, has to ensure that the system works.

He said the contract for the system itself, which included the management of the toll gantries and collection of billing information was more technical and stretched over 8 years.

The operation of the system, which includes transaction clearing and violation centre, is only for five years. “We believe after five years the system would have proved itself.” ETC will still be obligated to maintain the system, but the operations will go out on tender again. “It consists of a financial component (transaction clearing) and the violation process.” He says management of the toll system is specialised, with less than ten companies worldwide able to do the job, but many local companies had the capacity to take over the operations.

Van Niekerk did not name possible contenders. Obvious possibilities include Bakwena, that manages the N4 toll concession and has local and international investors, Trans African Concessions (TRAC) in which Basil Read and Stefanutti Stocks have stakes, Murray & Roberts subsidiary Tolcon that is operating the N3 toll concession among others and Group Five’s Intertoll, that is operating toll roads in Eastern Europe and Zimbabwe.