OUTA PRESS STATEMENT 25 June 2013.
OUTA CONCERNED GFIP COLLUSION FINES TOO LOW
OUTA welcomes the announcement on Monday by the Competition Commission, which fined 15 construction groups a collective total of R1.46bn to settle a multiyear investigation of bid rigging. It is, however, noted that the settlement at 5% of the estimated R30bn in project value, falls well short of the 10% of turnover guideline without adjusting for inflation since around 2009.
Reports further indicate that the collusive behavior impacted the construction of the Gauteng Freeway Improvement Project (GFIP), which SANRAL now plans to Toll in order to fund these costly upgrades. OUTA calls upon the Competition Commission to release details of the extent of the collusion on the GFIP project and further calls for part of the R1,46bn fine to be allocated to SANRAL’s repayment of GFIP. The public should not have to carry the implications of past collusive pricing, into the future.
OUTA has also noted the lack of response, to date, from SANRAL who we would have expected to be outraged by the collusive behaviour related to the GFIP projects. One wonders how SANRAL, who are supposed to be experts at road construction pricing, allowed such collusive behavior to go unnoticed or unchallenged at the time of the GFIP tender process. This decision comes only a few weeks after we learnt of the forecasted annual R670m earnings by Kapsch Trafficom for its share of the Gauteng eToll collection services, which equates to as high as 40% of the estimated eToll collection costs to society.
OUTA wishes to remind SANRAL and its spokesperson Mr Vusi Mona that the eToll decision by the Con Court in September 2012 overturned only the interdict against SANRAL to launch eTolling, which is a completely separate legal matter to the merits of the decision to proceed with eTolling, which will be tested at the Supreme Court of Appeal in September this year. Mr Mona, in his recent comments, appears to not recognise the critical difference nor, for that matter, cannot explain why SANRAL has delayed their eToll launch for over nine months since the September 2012 Con Court case, despite SANRAL’s court testimony which clearly indicated their need and intention to start tolling within two weeks of the interdict being set aside. The regulatory framework is part of the entire process and is still fraught with challenges, some two years after SANRAL’s initial eToll launch dates in 2011.
Indeed, Mr Mona should also take note of the fact that SANRAL had lacked transparency in its dealing with regard to GFIP contract documents presented to COSATU in 2011, which had many pages blanked out. In a more recent court interdict in the Western Cape, SANRAL was stopped in its tracks from forging ahead with tolling plans in that region, due to amongst other things, a lack of transparency on costs and information required for public engagement.
Furthermore, SANRAL has lost in other legal matters before various courts around the country, including the outcome of the HMKL case last year (which resulted in the moving of the Centurion gantry due to the lack of legal compliance to the Environmental Impact Assessment process) and in the KZN South Coast toll concession tender case. These incidents are not smoke nor allegation but fact.
Wayne Duvenage, the Chairperson of OUTA commented that he was “sad to see how the integrity of a once respectable state owned entity such as SANRAL has been tarnished over the past few years, as a result of the GFIP process which has been characterised by high costs, a lack of transparency and irrational decision making. We are hopeful that OUTA’s Supreme Court of Appeal hearing in three month’s time, will finally demonstrate the shocking extent of this matter which has been nothing short of a sheer lack of respect for the citizens of this country.”
Issued by Wayne Duvenage. Chairperson OUTA