Shock toll-roads report

CONFIDENTIAL: Documents show a discrepancy in the figures given by Sanral and according to leaked documents.

CONFIDENTIAL: Documents show a discrepancy in the figures given by Sanral and according to leaked documents.

Published May 27, 2011



The cost of operating Gauteng’s toll roads may be as high as R14 billion – more than double the R6.22bn the roads agency said it would cost.

This figure excludes the cost of feasibility studies, the design of the toll system and the supply of e-tags. The cost of upgrading the roads is estimated at R17.5bn.

The inflated operational costs were revealed in a confidential report sent anonymously to The Star. The report, dated April 2010, discusses, in detail, the operation progress report for the Gauteng Open Road Tolling.

The SA National Roads Agency Ltd (Sanral) denies the tolls are costing this much and reiterates that the tender to build and operate the toll roads was R6.22bn over eight years.

But in its response, Sanral indicates that the R6.22bn did not include VAT, and there are extra costs – but it would not reveal these specific amounts to The Star.

The Star could not independently corraborate the report.

The newspaper revealed two months ago that the tender for the building, operating and back-office supply of the gantries and tolls had been given to the Electronic Toll Collection (ETC) consortium.

Nazir Alli, Sanral’s CEO, said ETC were awarded the tender because they were the lowest bidder. He said competing companies offered bids of R8.79bn, R9.02bn and R15.29bn. This means ETC was cheapest by more than R2bn.

However, other documents leaked to The Star include ETC’s tender offer, contract number N.001-201-2008/1. This document indicates the tender offer was for R9.9bn.

This was divided into R1.3bn for the design-build, R8.2bn for the operation and R371m for asset replacement. The offer is signed by Jamie Surkont from TMT and Salahdin Yacoubi from Kapsch.

Surkont would not comment on the tender offer, but agreed he was the signatory on the tender documents.

An e-mail from Sanral’s public relations firm, Magna-Carta, said the total amount tendered by ETC was R6.22bn. This offer excluded allowances for inflation, provisions, contingencies and VAT.

“Provisions are allowances for the procurement of parallel and support services for the implementation and operations of the Open Road Tolling system, such as the clearing/transaction fees, marketing and communication services, and utilities etc,” Magna-Carta said.

Sanral said: “The R6.22bn is the tendered part of the total amount. The exclusions referred to above are not under the control of the tenderer and do not influence the competitiveness of the tender.

“Hence, the estimated sum of the exclusions would have been the same for all tenders. For budgetary purposes, it is standard practice to add an allowance for inflation, provisions and contingencies.

“The tender amount did not increase, but the actual amounts that will be spent over time will be adjusted for inflation – similar to conventional contracts,” Sanral said.

A senior person at ETC, who does not want to be named, also said the tender was R6.22bn.

He said the consortium had a “measurable” contract with Sanral, which means they are paid for the volume of work they do, against a tendered rate. This means the final amount will depend on the amount of work they process.

“The current estimate, based on traffic and service projections, is that this will be in the order of R6bn. In the long run this may vary up or down,” he said.

In response to a question about full operating costs, Sanral gave a detailed response that said they could not divulge this figure as it was confidential. (Find Sanral’s full response on

a separate tender was also awarded for vehicles’ e-tags, and was awarded to Kapsch Trafficcom AB and Q-Free ASA, a Norwegian company.

The tender is for three years, and R191.6m worth of tags have been ordered. The total cost for the e-tag tenders is R246.68m.

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