Sanral’s road building shock
Way above global benchmarks
ROAD construction in South Africa cost between 100 percent and 300 percent more than global benchmarks, according to independent research conducted for the Opposition to Urban Tolling Alliance.
Wayne Duvenage, the chairman of the alliance, now named the Organisation Uniting Against Tax Abuse, said yesterday that the alliance was still analysing the research, but claimed the SA National Road Agency Limited (Sanral) was grossly overpaying for road construction in South Africa.
“That talks to more than just collusion. We believe other forces are at play and there is a strong chance of maladministration and corruption,” Duvenage said.
“We also believe there is a cosy relationship between construction companies and Sanral that allows them to get away with exorbitant prices.
“That is spelt out by the fact that the same collusive companies on the GFIP (Gauteng Freeway Improvement Project) are the same companies that are able to submit unsolicited bids in the Western Cape and get toll contracts.”
Vusi Mona, the general manager of communications at Sanral, said the alliance must publish the report for scrutiny so that Sanral could engage with it and its authors.
Mona said there was no unit cost for road construction that was an international benchmark that Sanral was aware of, adding that typography and availability of material differed from country to country.
Sanral took strong exception to claims that there was a cosy relationship between Sanral and construction companies, he said, stressing that the alliance must furnish Sanral with proof of any such cosy relationship.
“Better still, it (the alliance) must approach any constitutionally charged organ of state that deals with such matters as this would amount to corruption.
“As for the Western Cape, Sanral has a policy on unsolicited bids, but such bids are still subjected to normal procurement processes. For the record, no toll contract was awarded in the Western Cape. Only a preferred bidder was identified,” he said.
Pierre Fourie, the operations director at Master Builders South Africa, said the product the alliance was referring to was civil construction rather than building work.
“We have certainly not produced a document or formed an opinion whether prices Sanral paid were out of the ordinary. We don’t have opinion on that,” he said.
Fourie referred further queries to the SA Forum of Civil Engineering Contractors, but its executive director, Webster Mfebe, was not available for comment.
Duvenage said that when a road was built in South Africa, the lane-per-kilometre cost varied but was between 100 percent and 300 percent more than what it cost in other parts of the world.
He said this increased cost could not be attributed to imported products because bitumen was available in South Africa, the country’s labour costs were known and the road building machinery was in the country.
Local conditions
“So there is no reason to say that local conditions will push up prices and it’s more expensive to construct a road here than elsewhere in the world. The question is why do we pay more? If you compare likewithyou see this massive difference. We believe that there is something amiss.”
He said the huge difference in road construction costs in South Africa compared with other countries in the world could be caused by “a relationship” between the client that was possibly allowed contractors, consultants and middlemen to charge exorbitant fees.
“For collusion to happen is one thing and for SOEs (stateowned enterprises) to allow collusion to slip under their noses would give rise to a 10 percent increase in costs, not 100 percent,” Duvenage said.