Sanral denies toll-cost claim

2011-05-27 14:30

There has been no “ballooning of costs” for the operation of Gauteng’s toll roads, the SA National Roads Agency Ltd (Sanral) said today.

“Sanral categorically states that there has been no ‘ballooning of costs’ in terms of the original contract, as awarded for the operations of the Gauteng Open Road Tolling (ORT) project,” the agency said.

Claims by the media of a R14-billion cost increase were “an incorrect interpretation that the original cost for this project has escalated”.

Earlier, The Star newspaper reported that the cost of operating the province’s toll roads might be as high as R14 billion, and not the R6.22 billion Sanral said it would cost.

The newspaper said this excluded the cost of feasibility studies, the design of the toll system, and the supply of e-tags, and that the cost of upgrading the roads was an estimated R17.5 billion.

It said these figures were contained in a confidential report, dated April last year, that was leaked to the newspaper.
Sanral said the amount stated in the newspaper report was “an escalation of the original project cost over the 10-year-duration for this project”.

“The newspaper report, therefore, wrongly included future estimates related to contract price inflation, as well as added VAT, and compares it to the original contract amount, which excludes VAT, inflation and provisions. The original scope of works has never changed”, Sanral said.

In a statement earlier today, United Democratic Movement secretary general Bongani Msomi said the high cost of operating the toll roads was “extremely disconcerting”.

“The poor consultation process, the minister’s stubborn reaction to people’s concerns, and now the shock of the operational cost,” he said.

This was an example of government’s “poor prioritisation and planning”, he said, and questioned whether it could afford the high cost of operating the tolling system.

Sanral said the application of contract price inflation was in accordance “with international best practise (FIDIC Conditions of Contract), as compiled by the International Federation of Consulting Engineers”.

Further, the effect of inflation and VAT was accounted for in the financial model, which “was recently independently audited by two international auditing companies”.

The agency added: “Therefore this alleged ‘ballooning of costs’ does not affect the toll tariffs previously announced, or that may be announced following the conclusion of the public participation process.”

Earlier this week, the transport department said the release of a report by the steering committee of the Gauteng Freeway Improvement Project could take another month.
The committee had been expected to finalise its report and hand it to Transport Minister S’bu Ndebele at the end of April.
The department said the toll project was in a review phase, brought on by Ndebele’s acknowledgement that everything the government did should not put pressure on road-users and the public in general.

Toll fees were originally set at 66 cents a kilometre, but were put on hold after a public outcry.

The tolls form part of the Gauteng Freeway Improvement Project, which includes widening roads, easing congestion at bottlenecks and improving lighting.

It is managed by Sanral, which aims to upgrade 560km of roads in the province.

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