Outa calls on Ministers to establish commission of inquiry into ‘excessive’ GFIP costs

The Organisation Undoing Tax Abuse (Outa) on Monday called on Transport Minister Dipuo Peters and Public Enterprises Minister Lynne Brown to intervene and commit to introducing a commission of inquiry into the “excessive costs” of the first phase of the Gauteng Freeway Improvement Project (GFIP), that was undertaken by the South African National Roads Agency Limited (Sanral) between 2008 and 2012.

Speaking at a briefing on Monday, Outa chairperson Wayne Duvenage said the organisation, which claimed that Sanral had “grossly overpaid” by almost R10.8-billion, would further write to the Ministers for clarity on the general high cost of road construction in South Africa over the past decade.

It also called on the commission of inquiry to investigate the estimated project costs of R15-billion to build the 80 km N3 Cedara to Durban freeway project, which Outa believed was also “excessively overpriced”, as well as the lack of meaningful action taken against construction industry players that were found to have participated in collusive tendering practices.

Additionally, Outa will also be requesting to engage with the Construction Industry Development Board (CIDB), the South Africa Institution of Civil Engineering and the South African Forum of Civil Engineering Contractors (Safcec), to establish their roles and responsibilities in investigating alleged collusive practices by construction companies.

“We want to know why the CIDB has halted its in-depth investigations into the matter,” Duvenage said, adding that Outa would report on its own investigations shortly.

Outa will further lodge complaints with the Public Protector, the National Treasury and others, with a view to seeking their intervention.

The organisation on Monday also released an updated position paper, tilted ‘The Road to Excess: A Paper on High Pricing, Collusion and Capture of National Road Construction’, which it said was broader than a benchmarking exercise and sought to expose the extent of the exorbitant inflation of the GFIP cost to society.

Outa engaged with experienced industry experts and conducted a range of price estimation methodologies to arrive at its “fair value” price tag for the first phase of the GFIP. This was made possible by using tender documents of one of the work packages it obtained, as well as other key quantity details and significant input obtained from a number of GFIP presentations given by Sanral and the construction companies between 2008 and 2013.

In addition, Outa gathered more information on other road construction projects, which offered further benchmarking evidence, which it said pointed to an excessively inflated price of R17.9-billion.

Duvenage highlighted that even if Outa’s calculations were wrong and that it missed the mark by as much as 20%, the price tag remained excessive. “We were very generous with our [price calculations],” he added.

Transport portfolio director Ben Theron added that Outa still wanted to obtain the full tender documents and conduct a detailed and accurate costing exercise of the GFIP. “However, until that takes place, we believe in our analysis and conclusions,” he said.