Uncertainty over the future of electronic tolling for the Gauteng Freeway Improvement Project (GFIP) has led to doubts being expressed over whether the SA National Roads Agency (Sanral) will receive any bids for a re-tender to operate the system.
This comes after Sanral on July 26 re-tendered the Open Road Electronic Toll Collection (ORT) system at the GFIP, the National Transaction Clearing House (TCH) and the Violation Processing Center (VPC).
The deadline for bids for this tender, initially valued at 6.872 billion rand, is September 7 – more than a month before the government is expected to announce its final decision on the future of e-tolls.
Electronic collection notice
In June, Transport Minister Fikile Mbalula said during briefings on the cancellation of the Sanral tenders that the government would make an announcement on the future of e-tolling in the Medium Term Budget Statement in October.
Mbalula said the government scrapped the plan to use the fuel levy instead of e-tolls to pay for the GFIP due to the recent spike in fuel prices.
Sanral acting CEO Lehlahonala Memeza, meanwhile, said awards for all five canceled tenders were expected to be made by September.
This raises the question of how the Gauteng ORT tender will be managed given the uncertainty surrounding the future of e-tolling.
Sanral previously confirmed that it has extended the Electronic Toll Collection (ETC) contract for the ORT system until September 15, meaning that the extension expires eight days after the ORT tender closes.
“So Much Uncertainty”
Undoing Tax Abuse (Outa) CEO Wayne Davenage stressed that if electronic toll collection and management is excluded from the ORT tender, “it’s a completely different contract”.
Duvenage questioned whether companies would be willing to bid on this basis when there is so much uncertainty surrounding the future of electronic tolling.
“You’re bidding on this, but you’re actually bidding on something else,” he said.
“It should be a repurposed organization, and I guess the bidders will be told that.
“Sanral will have to try to get people to bid by saying this is what you bid for, but bidders will be bidding on a broken system that cannot be fixed,” he said.
Automobile Association (AA) spokesman Leighton Bird said it was a concern that any potential bidder could bid if there was no clarity on the future of the business.
There will be “flexibility”, says Sanral
Responding to a Moneyweb query, Sanral’s CEO of Marketing and Communications Vusi Mona said last week that Sanral’s procurement process led by the Development Bank of South Africa (DBSA) for this tender will go according to plan.
Read: Sanral appoints DBSA to oversee award of 17.4 billion rand canceled tenders
“If there are any developments regarding the Cabinet’s decision on the future of GFIP, all necessary orders will be followed.
“It should be noted that the GFIP tender documents and terms of contract provide for full scalability and flexibility throughout the contract period to meet Cabinet’s decision, whenever it is made,” he said.
Mona said no one can predict how the tender process will unfold, adding that if the current contract with ETC needs to be extended, the relevant established processes will be followed.
The tender is designed for six years, including design, construction and operation periods.
It was among five tenders worth 17.4 billion rand that were canceled by Sanral due to material irregularities in the tender process when a January 2020 board resolution was not followed in the evaluation of those tenders.
Currently, TCH is almost exclusively used for electronic toll payment by various toll operators and toll collection points.
However, in 2019, Sanral confirmed that it was in the process of repackaging and expanding the functionality of its TCH to provide a host of other mobility services.
It said the initiative would see the e-payment account become a mobility account that could be used for things like vehicle license renewals, cashless parking, fuel payments and using Sanral customer service centers to renew driving licenses .
There are better financing options, says A.A
Bird added that the AA believes that funding for the GFIP should come from a portion of the fuel levy and at no additional cost to the consumer through increased fuel levy and fuel prices.
“The 90 billion rand generated annually from these fuel levies provides sufficient resources for the government to actually finance road upgrades in Gauteng. What we are saying is to take the money that is already available to the government through fuel levies and use some of it to pay for the GFIP,” he said.
Beard said the matter raises a significant question of misappropriation and misallocation of funds by the government.
He said there are several examples of this, including:
2 billion rand a year is paid to the Gautrain when it benefits only a select few and not all citizens of the province.
60 billion rand paid to South African Airways (SAA) over ten years.
Over-reliance on the Road Accident Fund (RAF) levy to compensate road accident victims, without proper promotion of road safety and the empowerment of traffic enforcement agencies to better address road safety to reduce this over-reliance.