The Austrian company that won the contract to build and operate the e-tolling system in Gauteng made R1.2 billion in one year from its South African operation – mostly local traffic and parking fines and the sale of e-tags.
The controversial e-tolling system is due to be introduced at the end of next month because the government has publicly admitted it has no other option to repay the loans incurred by the South African National Roads Agency Limited (Sanral).
Austrian company Kapsch TrafficCom recorded a bumper profit in the 2010/11 book year, according to its financial report in March last year – which was released in Austria and posted on the company’s website.
This year’s report is still to be released.
The company operates all over the world, including Australia, Austria, the Czech Republic and Poland, but it was SA which contributed almost a third of its entire profit.
It won the tender to operate the Gauteng e-toll in a consortium with Cape Town company TMT Services and Supplies, known as Electronic Toll Collection. The contract to operate the tolls will run for eight years.
Just a few months after being awarded the toll tender, Kapsch bought the majority shares in TMT for R75m, a premium of R14m more than the company was worth.
“TMT Services and Supplies engages in projects for traffic and parking monitoring in several South African cities, including speed monitoring in Johannesburg and in the Mpumalanga province,” the financial report reads.
The report indicates that the revenue from SA came mainly from the Gauteng e-tolling project and the delivery of e-tags, but a large part may also be due to Kapsch’s interest in traffic-fine enforcement.
Kapsch also indicated in its financial reports that it would be spending billions of rand in SA.
Although this is not stated, it is assumed the money would be due to the building of the toll system, including its gantries, administrative costs and computer systems – costs that the company is likely to make back when toll fees come in.
Under contingent liabilities, or payments the company is expecting to make, the company says the contingent liability was R1.17bn in the 2009/10 financial year for projects in Gauteng, Mariannhill and Huguenot.
In 2010/11, the amount was R1.2bn, and halfway through this financial year, the contingent liability payment was R1.06bn.
“In a separate tender process for the delivery of over 1.8 million on-board units (known locally as e-tags), the Kapsch TrafficCom Group was also able to win a large share of the contract, amounting to over 1.5 million units,” the report said.
Meanwhile, Cosatu spokesman Patrick Craven said yesterday:
“Cosatu is opposed to the privatisation and commoditisation of what should be public roads. They should not be there for a private company like Kapsch to make money at the expense of the people of Gauteng.”
Gary Ronald from the Automobile Association said the high revenue from SA was “scary”, considering the size of the vehicle population compared to other countries that Kapsch operates in.
“There are only 10 million vehicles in South Africa, 4 million in Gauteng,” said Ronald.
“Is this the amount of money they can make from just 185km of roads?”
Neil Campbell from the DA said there had to be an explanation for why so much money was being allowed to leave the country.
“If the profit is shown to be too large, it will give new meaning to the term ‘toll-gate’ by putting it in the company of Watergate,” Campbell said.
Justice Project SA’s Howard Dembovsky said he believed the revenue was coming mainly from traffic fine infringements, and that with 14 000 road deaths every year, the money from fines would be better spent maintaining the roads, improving infrastructure and improving safety, which would reduce the number of accidents.
“TMT is not the only provider in this country for traffic fines. I have always believed the revenue from traffic fines in South Africa is worth billions of rand. It is a cash cow for companies and road enforcement agencies instead of being poured back into road-death awareness and road infrastructure,” Dembovsky said. - The Star