Sanral wasting taxpayer money with irregular, fruitless and wasteful spend - Scopa

Cape Town – The Standing Committee on Public Accounts (Scopa) has raised concerns over the South African National Roads Agency’s (Sanral) very high levels of irregular, fruitless and wasteful expenditure, which has resulted from non-compliance with supply chain management processes.

The oversight committee on Wednesday held a meeting with Sanral with regard to this as well as deviations from procurement processes.

According to a report submitted by Sanral, accumulated irregular expenditure for the 2016/17 financial year amounted to R10bn, and fruitless and wasteful expenditure was over R15m. “Taxpayers’ money should not be wasted in such a manner,” the committee said in a statement.

Scopa said that Sanral was deliberately ignoring National Treasury and the Public Finance Management Act (PFMA), which has resulted in the agency’s finances being in a bad state.

The report also detailed how the expenditure was accumulated. For example, in one instance R549 000 of irregular spend was as a result of competitive bidding processes not being followed.  There were two instances where a further R33 000 was incurred when bids were not awarded to the lowest bidder.

In another case, two contracts to the value of over R14.4m for overload control centres were extended for a short period, while Sanral was waiting for approval from Treasury for longer extensions of the projects.

Treasury approved the extensions, but did not indicate the approval applied to the short period too. This meant it is not regarded within the prescripts of the PFMA for inviting bids on a competitive basis, the report stated.

More than R3.7m was incurred in a matter relating to conflict of interest when a member of the Bid Evaluation Committee failed to declare his interest.

Fruitless and wasteful spend

The interest and legal fees incurred for the N1/N2 Winelands Toll Highway Project resulted in fruitless and wasteful expenditure of over R14.9m.

The committee raised issue with unsolicited bids that bind Sanral to compensate suppliers if projects fail. This was seen in the unsolicited bid of Protea Parkways for the N1/N2 Winelands Toll Highway.

Interest and finance charges had to be paid to Protea Parkways as the scheme developer in the event that the project would not go ahead, the report read.

“The impaired losses at Sanral is a major challenge which can cripple Sanral,” the committee said.

Scopa added that the large number of deviations from procurement processes could have been avoided if Sanral did proper planning. “As Scopa we are saying that deviations and expansions must be under exceptional cases and not a norm” said committee chair Themba Godi.

There is a risk factor that deviations make it easier for “corrupt officials” to say only certain companies are able to offer services.

Scopa also plans to follow up on the progress of two investigations into Sanral, by the Special Investigating Unit and the Public Protector.

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