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Sanral rubbishes Outa’s claim that GFIP was 321% overpriced, questions its motives

To watch a video in which Sanral refutes Outa’s findings that it paid 321% more than was needed for the Gauteng Freeway Improvement Project. Video and editing: Darlene Creamer 12.4.2016

12th April 2016

By: Ilan Solomons
Creamer Media Staff Writer


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The conclusions reached in the Organisation Undoing Tax Abuse’s (Outa’s) recent position paper only served the objective of Outa, namely to discredit the South African National Roads Agency Limited (Sanral) and the road agency’s integrity, said Sanral spokesperson Vusi Mona on Tuesday.

In a media briefing in Tshwane accompanied by CEO Nazir Alli and toll and traffic senior project manager Alex van Niekerk, Mona refuted Outa’s claim that the Gauteng Freeway Improvement Project (GFIP) was overpriced by as much as 321% when compared with road construction pricing systems around the world.


He further told the media that, through its legal representatives, Sanral had requested Outa to substantiate its claims of irregularities in the construction and management of the GFIP.

“We also asked [Outa] on March 23 to provide all information including detailed engineering reports, research and financial calculations on which allegations contained in a recently published report are based. Outa was requested to respond by April 6 but failed to do so,” stated Mona.
Van Niekerk stated that Outa’s 29-page document could be dismissed as early as its second page where it had recorded that the Gauteng freeway network consists “of about 185 km.”


“The actual length is 201 km, which undermines the veracity of all the other figures quoted in the document, which rely on the length of the Gauteng freeway network,” he contended.
Van Niekerk pointed out that, in the first case study referred to in Outa’s report, the organisation had confused the unit of measurement. 

“It incorrectly extracts construction costs in Europe and bases its calculations on these values in millions of euros instead of the billions stated in this study. This constitutes an almost 100 000% error. 

“Was this done deliberately to create perceptions or just plainly to misinform the public? Based on Outa’s own calculation, but with the correct values inserted in billions not millions, the GFIP freeways are in fact 99.7% cheaper than the comparable European costs,” he said.

Van Niekerk pointed out that the second case study used by Outa explicitly noted that one should not approach construction cost estimates in urban environments in the manner in which Outa conducted its research.

“When it comes to very large, complicated projects, the significant variations in scope and setting for each project limit the usefulness of the State-to-State comparisons. The biggest factor in the variations is structures and interchanges. Projects that have structures and interchanges have a much higher cost per lane mile,” stated the case study.

Van Niekerk said that, without escalating the 2004 figure to 2010, and applying an exchange rate of R7 to the dollar used by Outa, this case study’s derived cost amounts to R43-million per lane-kilometre. 

He remarked that this was equivalent to R387-million per centre line-kilometre when applying the Outa arithmetic. Van Niekerk contended that applying these numbers in the Outa calculation, the GFIP freeways were at least 77% cheaper than the 13 relevant projects that should have been considered by Outa.
The majority of the remaining case studies relied upon most by Outa in its report primarily compare rural roads in Africa and elsewhere in the world with the modern GFIP freeways. Outa itself stated that one needs to compare “like with like”, said Van Niekerk.

He stated that these “inherently defective comparisons” were used by Outa to support its “fatally flawed” conclusion that Sanral had been overcharged by 321% for the construction of the GFIP.
Further, Van Niekerk highlighted that Outa quoted regional planners, engineers and research teams without naming them or detailing their qualifications.

He said they had referred to “benchmark studies” and “generic models” without indicating their relevance in the South African context. 

“Outa also fails to take into account many of the elements of the GFIP such as the costs of retaining walls, drainage structures and the relocation of existing services such as power lines and pipelines,” Van Niekerk stressed.
He reiterated that the GFIP was a much-needed multiphase project to upgrade the Gauteng freeway network. Only the first phase had been completed and the expanded freeway had to be built to address a 20-year backlog.
Mona stated that the GFIP remained an integral part of the transport solution for Gauteng. 

“It has, and will, continue to add value to the surrounding infrastructure, improve the quality of a daily commute and sustain the economy of Gauteng, contributing to its future growth. 

“Without a sustainable financing mechanism to build the more than 150 km of planned new freeways in Gauteng, the province’s economy will be negatively affected, as will the quality of life of the commuting public,” he stated.
Meanwhile, Alli said he questioned the motives of entities that attack institutions and State-owned entities such as Sanral.

“We need to examine what it is that is driving them to do these sort of things and what their agenda is.

“We need to ask whether they have a different agenda to the one that we all as a country are trying to promote in terms of building a nation. Are they against promoting social cohesion? I am very suspicious of peoples’ motives that try to drive these sort of processes like the ones that are being undertaken against Sanral,” he remarked.

Alli appealed to the media contingent to value its responsibility of informing the South Africa public on matters of national importance.

“The public relies on what you write and present and it would have been very useful, if at the time that Outa published its report that the necessary questions were asked to the organisation regarding the accuracy of the calculation recorded in the document, instead of blindly and glibly accepting their report as correct.”

He asserted that Sanral had clearly shown that what Outa did could be regarded as a “deliberate misrepresentation” of the facts.

“Outa is essentially encouraging lawlessness by telling people not to pay their etoll accounts. This is hugely unacceptable as none of us can be selective about which laws we will follow. Our courts have repeatedly found that the toll roads in Gauteng are legal. Not abiding by these rulings is a clear sign of disrespect for the South African judiciary,” Alli concluded.


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