Sanral overpaid almost R10bn for e-tolls project, Outa alleges

The Organisation Undoing Tax Abuse (Outa) is continuing the fight e-tolls, revealing what it claims is more proof excessive prices were paid for the Gauteng Freeway Improvement Project.

Outa’s updated position paper, “The Road to Excess: A Paper on High Pricing, Collusion and Capture of National Road Construction”, was released in Johannesburg on Monday after wider and deeper research into the issue.

The SA National Roads Agency Ltd (Sanral) rejected the paper, calling it a “rehashed research report”.

Last year, Outa released its first position paper on the cost of the freeway project, which e-tolls fund. The paper compares the project with a number of international projects which cost far less.

“The exercise revealed that the rest of the world was able to build between two and three roads for every one road that Sanral built,” Outa transport portfolio director Ben Theron said.

“At the time, Outa also conducted a high-level costing exercise of the Gauteng Freeway Improvement Project and claimed that Sanral had grossly overpaid by approximately R10.8 billion when it paid R17.9 billion for the Gauteng freeway network upgrade between 2008 and 2012.”

Theron added that Sanral had lost “a great opportunity a year ago to deal with this issue in a constructive manner”, but did not do so.

“In addition, Outa gathered more information on other road construction projects – internationally and closer to home – which offered further benchmarking evidence pointing to an excessively inflated price,” he said.

“Outa reiterates its opinion that the project 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.”

Outa intends lodging complaints with the public protector, Treasury and others.

But Sanral spokesperson Vusi Mona said: “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. 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.”

He added Sanral was concerned that Outa’s focus on construction collusion was solely focused on Sanral, when the matter affected all organs of state.

“Outa would achieve more if it had taken up the matter with all organs of state and the private sector. We are nonetheless encouraged by its stated intention to approach industry bodies.”

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