Will Sanral receive any bids for the Gauteng open road tolling tender?

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12-08-2022
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Moneyweb
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If the collection and management of e-tolls is removed it’s ‘a very different contract’, says Outa.

The uncertainty over the future of e-tolls on the Gauteng Freeway Improvement Project (GFIP) has resulted in doubts being expressed over whether the SA National Roads Agency (Sanral) will receive any bids for the re-advertised tender for the management of the system.

This follows Sanral re-advertising on 26 July the tender for the Open Road Tolling (ORT) e-toll system on the GFIP, a National Transaction Clearing House (TCH) and a Violations Processing Centre (VPC).

The closing date for the submission of bids for this tender, which was originally valued at R6.872 billion, is 7 September – more than a month before the government is expected to announce its final decision on the future of e-tolls.

Announcement on e-tolls

In June, Transport Minister Fikile Mbalula indicated during briefings about the cancellation of Sanral tenders that the government will be making an announcement on the future of e-tolls in the the Medium Term Budget Policy Statement in October.

Mbalula said the government had scrapped a plan to use the fuel levy instead of e-tolls to pay for the GFIP because of the recent sharp increase in fuel prices.

Sanral acting CEO Lehlohonolo Memeza said at the same time the anticipation is that the tender awards for all five cancelled tenders will be made by September.

This raises questions about how the Gauteng ORT tender award will be managed to take into account the uncertainty about the future of e-tolls.

Sanral previously confirmed it had extended the Electronic Toll Collections (ETC) contract for the ORT system until 15 September, which means this extension expires eight days after the closure of the ORT tender.

‘So much uncertainty’

Organisation Undoing Tax Abuse (Outa) CEO Wayne Duvenage stressed that if the collection and management of e-tolls is removed from the ORT tender “it’s a very different contract”.

Duvenage questioned whether companies will be prepared to tender on this basis when there is so much uncertainty surrounding the future of e-tolls.

“You are tendering for this but in reality you are tendering for something else,” he said.

“It must be a repurposed entity and I imagine the tenderers will be told that.

“Sanral will have to try and get people to tender by saying this is actually what you are tendering for, but bidders will be tendering for a broken system that is not going to be fixed,” he said.

Automobile Association (AA) spokesperson Layton Beard said it is a concern that any prospective tenderer may be tendering for business when there is no clarity about the future of that business.

There will be ‘flexibility’ says Sanral

Responding to a Moneyweb query, Sanral GM for marketing and communications Vusi Mona said last week that Sanral’s procurement process, led by the Development Bank of Southern Africa (DBSA) as it relates to this tender, will progress as planned.

Read: Sanral appoints DBSA to oversee award of R17.4bn cancelled tenders

“If there are any developments as it relates to the Cabinet decision on the future of GFIP, all necessary prescripts will be adhered to.

“It should be noted that the GFIP tender document and contractual terms allows for full scalability and flexibility over the life of the contract to implement the Cabinet decision, whenever that is taken,” he said.

Mona said nobody can predict how the tender process will unfold, adding that should it be necessary to extend the current contract with ETC, the relevant prescribed processes will be followed.

The tender is for a period of six years in total, including the design-build and operation service periods.

It was included among the five tenders valued at R17.4 billion that were cancelled by Sanral due to a material irregularity in the tender process where a resolution made by the board in January 2020 was not implemented in the evaluation of these tenders.

The TCH is currently almost exclusively used for clearing e-toll collections for various toll operators and toll plazas.

However, Sanral confirmed in 2019 that it was in the process of repackaging and expanding the function of its TCH to provide a host of other mobility services.

It said the initiative will result in the e-toll account becoming a mobility account that could, for instance, be used for vehicle licence renewal payments, cashless parking, fuel payments and to use Sanral’s customer service centres for driving licence renewals.

There are better funding options, says AA

Beard added that the AA believes the funding for GFIP should come from a portion of the fuel levy and at no extra cost to the consumer through an increase in the fuel levy and fuel price.

“The R90 billion that is generated annually from those fuel levies provides ample resources for government to actually fund road upgrades in Gauteng. We are saying take the money that is already available to government through those fuel levies and use a portion of that to pay for GFIP,” he said.

Beard said this issue raises a significant question about the appropriation of funds and the misallocation of funds by government.

He said there are several examples of this, including:

The R2 billion a year paid towards the Gautrain when it benefits only a select few rather than all citizens in the province.

The R60 billion paid to South African Airways (SAA) over a decade.

Overreliance on the Road Accident Fund (RAF) levy to compensate victims of road accidents, without adequately promoting road safety and empowering traffic law enforcement to deal better with road safety to reduce this overreliance.