Sanral is claiming new toll roads will cost Gauteng road users a whole lot more than R6.2 billion over 10 years - because they failed to include VAT charges.
The SA National Roads Agency Limited initially claimed the winning bidder contracted to take on the toll project - a consortium known as Electronic Toll Collection (ETC) - had won the tender for R6bn over an eight-year period.
But now the agency has backtracked, saying the initial quote is too low. And they have refused to put a total figure to the cost of the project.
However, The Star last month disclosed that ETC, in fact, bid for the tender at R9.9bn - far higher than the amount Sanral had claimed. And a progress report dated April 2010, showed the actual costs had, in fact, escalated to R14bn over 10 years.
The document indicates the increased costs were not from VAT, but nearly R4bn in contract price adjustments.
The toll roads were decided upon as a money-generating mechanism through which Sanral would recover the costs of the Gauteng Freeway Improvement Project, which has seen the major highways around the city widened and upgraded.
Now, Sanral not only has to recover the costs of building the roads - R17.5bn - but will also have to cover the R14bn cost of the building and operation of tolls and gantries.
These figures don’t include the cost of the design and management done by another company, Tolplan, contracted to oversee ETC. This is yet another cost which Sanral has repeatedly declined to reveal.
Sanral claims that VAT charges are the reasons for increasing toll costs, but this is not supported in its original tender documents.
A request for bid documents, which Sanral sent to bidders of the tolling system, make it clear that tender applicants needed to include VAT in their offers.
Repeatedly throughout the document, prospective bidders are told that in their final costing, VAT of 14 percent needed to be included in their offers.
The document states that when anything needs to be provided - including labour, equipment and material - all costs inclusive of tax needs to be stated. When questioned on the apparent discrepancy, Sanral responded by referring The Star to its previous statement.
In that statement, Sanral said: “The R6.2bn tender excluded VAT, allowances for inflation and provisions and contingencies.”
But the R9.9bn tender offer by ETC, which is made up of Kapsch TraffiCom and TMT Services, clearly states it that includes VAT. The document was signed by Kapsch’s Saladin Yacoubi and TMT’s Jamie Surkont.
“We accordingly offer to design, execute and complete the works and remedy any defects therein so that they are fit for the purposes defined in the contract, and to operate and maintain the facility… For the lump sum of R9.9 billion, including Value Added Tax,” the tender offer reads.
The DA’s Jack Bloom said the inconsistencies begin with the fact that Sanral has not made it clear how much the tolling system will cost.
“Are we paying almost double just to operate a tolling system?” Bloom asked. “The cost of operating the tolls is almost as high as paying to build the roads. It begs the question: did we go for this expensive tolling system because someone could make money out of this?”
He asked if the system cost R20bn in total - including the cost of building the roads - or was it in fact costing R31bn?
Bloom said there was a history of VAT not being included in large tenders of this nature. - The Star