SANRAL kicks the can on road construction collusion

Over the past two and a half years, there has been a lot of talk but seemingly very little action from SANRAL to claw back the overcharges from the collusive construction companies – who were found guilty and fined by the Competition Commission Tribunal in 2013 for fraudulently pushing up the road construction costs of the Gauteng Freeway Improvement Project (GFIP).

18/04/2016 11:38:51

SANRAL kicks the can on road construction collusion

The purpose of this legally required action by SANRAL would not only be fitting punishment for the unacceptable behaviour of the collusive companies, but it would also alleviate the cash-flow pressures currently being experienced by this state owned entity, and ultimately society – who’s taxes and toll fees are used to keep them afloat.

“If we take a look at the timeline of events (below), a picture unfolds which depicts SANRAL as kicking the can down the road on this serious issue for the past two and a half years,” says Wayne Duvenage, OUTA’s Chairman.

On 6 December 2013, The Mail &Guardian reported it had established that SANRAL had applied for certificates from the commission, “making it possible for civil claims to be made against the construction companies … for collusion relating to the Gauteng Freeway Improvement Project. SANRAL had made 30 of 35 requests for permission to take civil action against construction companies,” the Mail and Guardian had reported.

In this same article, SANRAL spokesperson Vusi Mona said “the agency was taking action because it believed it is owed money. The point of civil action is to recover damages you suffered, and obviously we want to pursue recovery of these losses…. it was not possible at this point to quantify the damages being pursued…. these kinds of calculations take time and a lot of things have to be weighed up."

  • By June 2014, with more than six months having passed since the Competition Commission Tribunal had authorised SANRAL to begin the process of civil action against the construction companies, the Organisation Undoing Tax Abuse (OUTA) had still not seen or heard of any significant action being taken in this regard.

  • On 11 June 2014, OUTA wrote to Ms Tembakazi Mnyaka, the Chairman of SANRAL’s board at the time, enquiring feedback as to what action was being taken by them to claw back the overcharges on behalf of society. Two months later, on 14th August 2014, OUTA received a curt response from SANRAL’s lawyers, which dismissed their need to provide OUTA with the feedback sought.

  • On 23 June 2015, nearly eighteen months after SANRAL had indicated they were going to take action and would be calculating the costs of the claims expected, Timeslive ran a story titled “SANRAL to sue building companies.” This article quoted the CEO of SANRAL, Mr Nazir Alli as saying: “The amount of damages it was suing for had [still] not been determined, ….we are going to have a civil claim against them, we hope by the end of this month.” That was nearly a year ago.

  • Two months later, on 26 August 2015, in a media statement by SANRAL, Mr Vusi Mona states: “As for OUTA’s call for SANRAL to account over the collusion matter, the agency remains the only organisation that has opened a criminal case against construction companies that were named by the Competitions Commission to have colluded during the tendering processes”.

  • On 12 April 2016, two and a half years after the period started for SANRAL to begin with formulating the civil claims and the claw back process, Moneyweb quoted Mr Alli saying: “Independent experts are currently calculating the extent to which SANRAL overpaid as a result of collusion between construction companies that was later revealed. SANRAL would endeavour to recover it.”

“This is a clear case of procrastination and our concern is that in seven months from now, the ability for SANRAL to claim this money on behalf of the people of South Africa will prescribe. SANRAL’s comments made this week, shows us that two and a half years after the clock started, they have still not calculated the extent of the over-payment, having said they were doing this a long time ago,” says Duvenage.

SANRAL have a both a moral and legal duty to fetch these overcharges from the collusive companies, failing which their leadership could be held accountable for their lack of meaningful action. Furthermore, SANRAL is obliged to be transparent and meaningfully informative of their actions on such matters, so as to keep the public and the media abreast with detail thereof. “What could be taking them so long to determine the extent of the overcharges and to process these claims?” asks Duvenage.

OUTA is a proudly South African civil action organisation, that is purely crowd funded. Our work is supported by ordinary citizens who are passionate about holding government accountable and ensuring our taxes are used to the benefit of all South Africans.