More doubt over future of e-tolls as Sanral cancels tender

Roads agency Sanral has cancelled the tender it issued in August last year for the continued management of e-tolls and claims it has not been informed of any decision by the government on the future of e-tolls on the Gauteng Freeway Improvement Project (GFIP).

Sanral has also confirmed that it intends to reissue the tender.

Vusi Mona, GM of communications at Sanral, confirmed on Friday that Sanral’s board had decided to cancel the tender and stressed that Sanral has not been informed of any decision in regard to the future of e-tolls.

“The board’s decision to cancel the tender was informed by a review of the assurance documents from Sanral’s legal and internal audit departments, as well as expert advice provided by the independent advisor to the board’s audit and risk committee.”

The cancellation of the tender, which was in the process of being adjudicated, follows Sanral confirming on 12 March that its contract with Electronic Tolling Collections (ETC) for the management of e-tolls on the GFIP had been extended until December 2020.

ETC’s contract was also extended for three months in December last year, with this extension expiring at the beginning of this month.

Mona said the current ETC contract allowed for an up to 24-month extension.

Cancellation

“In December 2019, Sanral extended the ETC contract for three months to finalise the tender process. The Sanral board then took the decision to cancel the tender. Based on this decision, the current ETC contract was extended for a further nine months to allow for completion of the re-tendering process. The tenderers were also informed of the cancellation,” he said.

At the weekend, Organisation Undoing Tax Abuse (Outa) CEO Wayne Duvenage described the cancellation of the tender as “lots of smoke, lots of ambiguity and a lack of clarity”, adding that “nothing makes sense”.

He said it seemed that an announcement on the future of e-tolls was imminent last week, before the government’s announcement on Covid-19. “Obviously with the virus, it has been put off and I think there are more important things to deal with right now,” Duvenage said.

“So, it is again a case of wait-and-see and kicking the can down the road some more, with compliance continuing to drop.”

Duvenage believes people who are paying their e-tolls are getting frustrated with the fact that only one in five are paying their e-tolls and he called on them to stop paying. “That will end it sooner rather than later,” he said.

He said Sanral has scrapped the tender process more out of a decision to wait and see what government is going to do about e-tolls. “These are all indications that the end is nigh. If the government is going to carry on with e-tolls, Sanral has another nine months to re-tender.”

“They have stopped summoning for over a year; the test case is in the balance and by putting that test case on hold, they have effectively done a lot of damage to the strength of their case,” he said.

Moneyweb reported last year that Duvenage claimed Kusa Kokutsha, which submitted a bid of R7.6-billion for the tender, was allegedly only registered as a business days after the tender was first advertised and appeared to have been set up specifically to bid for the Sanral contract.

The other two bidders, according to Outa, were Phambili joint venture and SAeTO. It said Phambili JV submitted a bid of R11.4-billion while SAeTO did not list a bid amount.

Duvenage added at the time that the date on which Kusa Kokutsha was registered indicated that it did not have a track record as a business and, through its directors, is linked to outgoing contractor ETC. “Thus this appears to be ETC in a new guise,” he said.

Special purpose vehicle

Douglas Davey, ETC board chair, subsequently confirmed that ETC did not submit a bid for the tender because it is a special purpose vehicle and was therefore established only to manage and operate the Gauteng tolling system.

However, Davey said Kusa Kokutsha, in which TMT Services and Supplies has a 44% shareholding and KapschTrafficCom a 5% stake, did submit a bid. The majority shareholder in Kusa Kokutsha is a staff trust, with a 51% stake in the company. ETC’s original shareholders were TMT and Austria-based Kapsch TrafficCom.

Only part of the tender Sanral issued for an open road tolling system in Gauteng – a national Transaction Clearing House (TCH) and violations processing centre – relates to e-tolls on the GFIP.

The TCH is currently almost exclusively used for clearing e-toll collections for various toll operators and toll plazas but Sanral confirmed that it is in the process of repackaging and expanding the function of its TCH to provide a host of other mobility services, such as vehicle licence renewal payments, cashless parking, fuel payments and to use Sanral’s customer service centres for driving licence renewals.

• This article was originally published on Moneyweb and is used here with permission