Outa takes Sanral to court

Wants access to information on profits made by long-distance toll concessionaires; suspects they are excessive.
Sanral says it will have ‘no other choice’ than to defend the matter to protect the commercial information of its concessionaires. Image: Moneyweb

The Organisation Undoing Tax Abuse (Outa) suspects long-distance toll concessionaires may be making excessive profits and is taking the SA National Roads Agency (Sanral) to court in an attempt to obtain the evidence to prove it.

Outa CEO Wayne Duvenage said on Tuesday the organisation had, in terms of the Promotion of Access to Information Act (Paia), formally requested Sanral to provide it with the financial information and contract signed with N3TC, one of the concessionaires, but Sanral did not respond to this request.

The N3TC toll concession route starts at the Cedara interchange in KwaZulu-Natal and ends at the Heidelberg south interchange in Gauteng.

Duvenage said 30 days have passed and Outa is now taking this matter to court.

“It’s frustrating that we have to go to court to get information that is rightfully ours and we are entitled to it,” he said.

Sanral confirmed on Tuesday that it will be defending the court application.

Sanral GM for marketing and communications Vusi Mona said in terms of Paia, Sanral is obliged to protect the rights of other parties.

“In this instance, a mandatory protection is afforded in terms of Section 36 of Paia to protect commercial information of third parties [N3TC].

“As Section 36 is a mandatory obligation set upon Sanral to protect the commercial information of third parties, Sanral will have no other choice but to defend such an application in accordance with the law,” he said.

Credit to road users may be in order

Advocate Stefanie Fick, head of the accountability division at Outa, said the organisation believes the contracts with long-distance road tolling concessionaire companies must be transparent and their books open to the public – because Outa believes there is a possibility that concessionaires could be benefiting from excessive profits, part of which may require credit to the road users in the form of reduced toll fees or returns to Sanral.

Outa acknowledges that public-private partnerships (PPPs) – such as those between the Department of Transport, Sanral and the concessionaires to build a number of the country’s national road networks – are important.

It said these PPPs are known as BOT (build, operate and transfer) concession contracts that enable private companies to build, upgrade and maintain South Africa’s national road network on behalf of Sanral for specific time periods.

In the case of N3TC, this is for a period of 30 years.

But Duvenage said these roads are state assets that get transferred back to the state at the end of the concession period, adding all that Outa wants is absolute transparency.

Duvenage said the concession companies are entitled to make profits but stressed that these profits must be reasonable.

“We want to see in the contracts what that entails. We don’t trust Sanral. We never have because of the history and the fact they keep a lot of stuff close to their chests,” he said.

Duvenage added that Sanral’s financial results reveal that it gets a total of R80 million a year from its three concessionaires and “it’s exactly the same amount each year”.

‘Something doesn’t add up’

“This would indicate that little is being done in the annual evaluation of the concessionaire profits, leaving us with a suspicion that the public may not be receiving a fair share of return from these contracts.

“During the past 10 years, the toll tariffs charged by the concessionaires have increased by approximately 80%, yet Sanral has received a fixed amount.

“We know the traffic is not the same, we know the tariffs don’t stay the same, so what is that? Just a stipend? What informs that amount? Something doesn’t add up.

“If the profits are excessive, who is challenging them? Civil society has a right to question this because we pay the toll fees.

“If for some reason this has been overlooked and not investigated, we could find that the consortium of people who make up these concessions are taking billions out of the system. But we will never know until we get transparency,” he said.

Duvenage added that profits can be reduced by spending more money and granting massive bonuses, which is the reason Outa wants transparency.

He said Outa also wants details about the road maintenance work on the road concession and questioned who is doing the maintenance, whether it is an in-house company of the concessionaire company, and whether the price is competitive and market related.

Mona said Sanral does not believe its concessionaires are making excessive profits.

“All Sanral concession contracts contain clauses that prevent excessive profit scenarios and annual independent verification of financial statements.

“All the Sanral concessions’ annual financial statements are independently reviewed by the Auditor-General. As a result of the mandatory protection that is afforded in terms of Section 36 of Paia to protect commercial information of third parties, Sanral cannot make available this information,” he said.

Duvenage confirmed that Outa is in the process of requesting similar information from Sanral about its other two concessionaires.

Mona said if the information requested by Outa involves third party commercial information: “Paia provides for the mandatory protection of such information and Sanral will have to act in accordance with the law in protecting such information.”

Duvenage is unsure if Outa’s court application related to N3TC has been lodged but said “if it’s not, it’s on the way to the courts this week”.

He is unsure how long it will take to get a court date for the case, but stressed that Outa obviously wants it fast-tracked.

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Sanral GM for marketing and communications Vusi Mona said in terms of Paia, Sanral is obliged to protect the rights of other parties.

“In this instance, a mandatory protection is afforded in terms of Section 36 of Paia to protect commercial information of third parties [N3TC].

@Vusi – Anyone paying SANRAL and yourself … should be allowed to know what they paying for. Simple as that. There is nothing to hide. The public has the right to know what you thieves are spending the money on.

Tolls are ALWAYS a rent seeking initiative and penalizes the market and the users but allows for billions to be corrupted away.

Too true, Pragmatist. The whole Sanral deal was corrupt from the start, done with overseas companies also implicated in the disgusting Arms Deal. It is time the web of corruption – implicating many top ANC members – was blown aside by the courts. We the taxpayers have been suckered into paying too much in return for receiving very little in benefits.

The government also promised several time to finalise the Etoll issues. But as usual, the government cannot meet their obligations or promises to reveal the FINAL outcome of the E toll saga.

SANRAL may as well just hand over the info. The SCA shot their “commercial confidentiality” arguments to pieces in the Winelands case, concluding that State-owned monopolies don’t engage in competitive commerce, so the taxpayers’ rights to transparency trump confidentiality claims.

Precisely!
A state affair of this nature is definitely not non-public information. Sanral is highly deficient when it comes to ethics.

These heavily tolled roads generate enough money for their upkeep and expansion works. It is with this kind of behavior that they have to cross subsidize, penalizing taxpayers across the breadth of the country.

More to the point: these BOT (build-operate-transfer) contracts date as far back as the 1980s and have surely run their course. So when are we getting our roads back? (“transfer”). Or did they think we’d forget?

The Hugenot tunnel connecting Paarl and Worcester comes to mind. Was officially opened in 1984 and still attracts high fees to this day.

Sanral and their opaque dealings are taking a toll on us!

Well done Outa! Toll fees are excessive especially taking into account the limited maintenance and roadside assistance Sanral provides.

I actually worked for one of the companies allocated that toll route back in the day. Once awarded there was a great deal of back slapping amongst the participants who implied that this was profit forever. Since then tolls have always increased; BEE, ANC style (the Shaiks?) has been added, road access improvement marginal and often limited or reduced due to ongoing repair work.

One of the great money spinners was that all the longer pavement life designs by independent engineers were thrown out of the window and a “lick and stick maintenance” attitude, that continues up to today, adopted.

Power to OUTA.

Paul, I have driven very regularly on the N3 for the last 20 years and have formed the opinion that the road is over maintained. There is never a portion of the road that is not being resurfaced. This ties in with your observation re pavement life. I also think that this could be a method of the companies involved increasing their profits. Many / most of them are civil engineering companies and if you award yourself maintenance work then then the amount of money extracted from the toll concession increases.

If the government were so overly concerned about the spread of COVID they should have opened the Toll gates, making it free!

Instead we still have to stop, pay money (or give our credit card) and move along

2020 The year without logical reasoning

If it’s a government department, one can be guaranteed that there is fraud and or theft and or misappropriation and or a family member/friend tenderpreneur situation is involved.

Where there’s a stink, there’s the ANC.

End of comments.

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