Tech glitch delays Outa’s drive to expose ‘excessive profits’ from Sanral toll concessions

The drive by the Organisation Undoing Tax Abuse (Outa) to obtain more transparency from the South African National Roads Agency (Sanral) about possible “excessive profits” being made by Trans African Concessions (Trac) has been delayed by a technical hitch.

The High Court in Pretoria in November 2021 ordered Sanral, in an application it did not oppose, to provide Outa with the full contract and financial records of the toll concession with Trac.

However, Sanral claimed in January 2022 that human error led to confusion about the case numbers of high court applications by Outa for information about all of its long-distance toll concessionaires, which resulted in the Trac application being heard unopposed.

Sanral versus Outa

Sanral has to date not provided the Trac records to Outa but has lodged a high court rescission application that seeks to overturn this order.

Outa lodged a high court application calling for Sanral to be found in contempt of court for failing to hand over these records.

Both the rescission and contempt of court applications were partly heard in the High Court in Pretoria last week.

Trac, a privately-owned company, was awarded a 30-year toll concession by Sanral in 1997 to manage the N4 toll route from the Solomon Mahlangu Drive Interchange in Pretoria to the South Africa/Mozambique border.

Trac to intervene

Stefanie Fick, executive director of the accountability and public governance division at Outa, told Moneyweb that Outa received a “very late” affidavit from Trac in which it indicated that it wished to intervene in the matter.

“Trac are of the view they should have been cited because they have an interest in the matter,” she said.

Trac was not cited by Outa as a respondent in its case. Fick pointed out that all the parties agreed in court last week that this matter needs to be ventilated properly in a court.

She said this resulted in Outa withdrawing its contempt of court application against Sanral and Sanral withdrawing its rescission application.

Fick said this resulted in the setting aside of the court order compelling Sanral to provide Outa with the requested Trac contract and financial information.

“This whole case will start all over again, with Trac intervening as a party … Trac were given permission to intervene and need to file their answering affidavits and then we will have to put the matter back on the court roll for a fully-fledged opposed application,” she added.

Delay

Fick said it will probably take about six months after Trac files its answering affidavits before the case will be heard.

Advocate Sinomtha Linda, head of legal at Sanral, confirmed the rescission and contempt of court applications were heard but not finalised in the High Court in Pretoria last week.

Linda said Outa withdrew its contempt of court application and that the default order that was granted in November 2021 against Sanral and in Outa’s favour was rescinded.

She said Trac has also been granted leave to intervene in the main application to compel the disclosure of documents in terms of the Promotion of Access to Information Act (PAIA).

“We wish to state that at the time that Outa obtained a default judgment against Sanral – an application brought in line with the PAIA in terms of which Outa sought documents pertaining to Trac’s concession agreement with Sanral, from Sanral – Outa had not joined Trac to the legal proceedings,” she added.

“In this regard, Outa obtained a default judgment against Sanral without citing Trac, the owner of the information sought by Outa from Sanral.

“From the terms of the draft order made an order of the court, Trac has since been joined into the proceedings, which by implication denotes that Outa ought not have obtained the default judgment against Sanral,” noted Linda.

In an affidavit in support of Sanral’s rescission application, she denied Sanral had deliberately and intentionally refused or failed to comply with the default court order, stressing that Outa was made aware that the rescission application was forthcoming.

Linda said Sanral did not willingly elect not to be present at the time the application was called and had it been aware that the application existed and was proceeding, it would have definitely opposed the relief sought by Outa as it has done in similar cases.

She said Sanral has opposed the same type of application in respect of N3 Toll Concession (N3TC) and there would have been no reason not to engage with this application.

N3TC operates the toll concession on the N3 from Durban to Pretoria.

Outa has requested the identical information about all three of Sanral’s concessionaires.

The third concessionaire is Bakwena, which manages the toll concession for the N1 between Pretoria and Bela-Bela and the N4 from Pretoria to the Botswana border.

Linda said Outa has consented to N3TC intervening in another application.

“Given that the issues will be the same in respect of the PAIA requests in all three concessionaire contracts, it is submitted that the rescission is also necessary so as to allow for the potential ultimate consolidation of all three matters, thus ensuring the determination of the issues by a single court,” she said.

‘Not entitled to relief’

Fick said in an affidavit in response to Sanral’s rescission application that Sanral is not entitled to the relief it is seeking because a reasonable explanation for its default does not exist.

She said Sanral was repeatedly informed of the impending application.

“This is indicative of the bad faith, which underlies this rescission application and the applicant’s [Sanral’s] conduct in general. Sanral’s explanation for its default is wholly inadequate.

“Sanral was the author of its own misfortune, [and] at all material times it was aware of the application,” she said.

Fick denied the order against Sanral was erroneously sought and granted as alleged by Sanral.

She said if Sanral’s purported defence was valid, Sanral could have easily raised this in an answering affidavit or by showing up on the day of the court hearing and putting its human error version before the court since it was fully aware of the application.

Fick added that the rescission application was filed after the fact and out of time because Sanral became aware of the judgment on 19 November 2021.

“Only once the penny dropped in respect of the consequences to the judgment and the information sought, was the rescission of the order a consideration.

“The agreement entered into between Sanral and in this instance Trac is within public interest.

“Outa further wishes to establish whether Trac is generating revenue in terms of the concessionaire agreement that disproportionally exceeds the actual costs related to maintaining the toll roads,” she said.

“Should this be the case, Sanral may potentially be in contravention of the Public Finance Management Act, 1999.”

This article first appeared on Moneyweb and was republished with permission. Read the original article: Relief for taxpayers