Toll road fat cats

2011-02-20 17:41

Adriaan Basson and Moffet Mofokeng, City Press

Johannesburg - Eighty-five cents out of every R1 profit made from constructing and operating Gauteng’s controversial open road tolling system could land up in the pockets of an Austrian traffic conglomerate.

City Press can reveal:

» Kapsch TrafficCom, the Vienna-based company, effectively owns 85% of Electronic Toll Collections (ETC), a local joint venture company that was awarded the R6.2bn tender to design, build and operate Gauteng’s new e-tolling system; and

» The black economic empowerment (BEE) stake in the project diminished by more than 50% after the tender was awarded to ETC.

This comes after a week of public outrage over plans to charge 66c/km for motorists travelling on the 185km-long e-toll network.

The ANC is torn on the issue, with the party’s Gauteng leadership throwing down the gauntlet after emergency meetings last week.

Gauteng Premier Nomvula Mokonyane told City Press she would meet Transport Minister Sbu Ndebele on Tuesday to present other options, while ANC provincial secretary David Makhura has asked ANC secretary general Gwede Mantashe for a meeting.

In an interview with City Press, Makhura lashed out at those who suggested Gauteng’s working population should use alternative transport if they didn’t want to pay for toll roads [as suggested by Ndebele].

“People who say there is an alternative don’t understand Gauteng,” Makhura said.

More questions than answers

South African National Roads Agency Limited (Sanral) chief executive Nazir Alli tried to quell fears about the cost of the project at a news conference last week, but his presentation left more questions than answers.

» According to Alli, Sanral awarded the R6.2bn e-tolling tender to the ETC joint venture, led by Kapsch, but with a 35% local ownership.

However, a City Press investigation found that the shareholding of local BEE firm TMT Services and Supplies ­diminished to 15% after Kapsch bought 20% of TMT’s shares in April last year for about R70m – seven months after the ­tender was awarded.

TMT chief executive Douglas Davey told City Press the transaction was “primarily financially driven” and that Kapsch would assist TMT with access to “international markets”.

Davey said “actual profit” from the project would ­accrue to many entities and he ­expected less than 25% of profits to be “repatriated”.

» When the project was announced in September 2009, mention was only made of the R1.16bn cost for the design and building of the system.

Operational costs

Alli revealed on Wednesday that the bulk of the contract (R4.73bn) was for operational costs over eight years.

Asked why Sanral couldn’t operate the system, spokesperson Wanda Cloete this week said: “Sanral has always appointed contractors to construct, maintain and operation infrastructure or toll operations through competitive tender processes”.

» When Sanral issued a pre-qualification for the tender, the contract was divided into five packages, for which different companies tendered. In the end all the packages were awarded to ETC.

Cloete said the tender “prescribed” that only one main contractor would be appointed.

Sanral issued bonds and borrowed money from international financial institutions to fund the R22bn road constructing and tolling project.

Funding

KPMG senior economist Lullu Krugel last week questioned the agency’s calculations.

Sanral is on record as saying it expected to earn more than R300m a month from toll fees.

“The bonds issued were maturity bonds. The first one matures in 2020, then in 2023 and then in 2034.

At R300m per month, Sanral will be able to pay back all the bonds plus interest over eight years (in June 2019). Why so quickly?

And what will happen to the money Sanral makes after this?

“We already pay our taxes and levies on petrol for road maintenance, and now this.

People are not convinced the money will be spent effectively,” said Krugel, who will have to pay an extra R1 500 per month on travelling costs herself.

Effect study

Makhura told City Press the Gauteng ANC was asking for a task team that would conduct an effect study of the toll system.

“The plan as it stands at the moment will have grave consequences for people in terms of their living standards and the economy.”

Makhura said the government should create efficient and reliable public transport first before it could force people to abandon their cars.

“The only alternative is taxis and taxis as we have them now are a problem. Nobody should even talk about the Gautrain as an [affordable] option.

The railway is completely unreliable. What the tolling is going to do is to push people onto municipal roads and those roads are going to be severely damaged.

People who say there is an alternative, don’t understand Gauteng,” Makhura said.

Mokonyane said she would not be “challenging the tolling, but the application of the strategy” in her meeting with Ndebele.