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The Organisation Undoing Tax Abuse (OUTA) commends the recent initiative of a transformative agreement between the construction industry and Government. While we hope this will now eradicate corruption and fraudulent activity within the construction industry, we also sincerely hope that this initiative has not been introduced to set aside or negate the legal action and claw-back of ill-gotten gains that still need to unfold after past collusive practices.

“We believe the intentions of this new agreement are not only noble, but due to past behaviour which has cost society billions of unnecessary rands, also very necessary and almost expected by society and the industry as a whole,” says Wayne Duvenage, OUTA’s Chairman.

In a related matter, OUTA notes the following statement in SANRAL’s Annual report of 2016: "SANRAL issued summonses on 15 April 2016 in the Gauteng Local Division, Pretoria claiming damages totaling R760 million against Construction Contractors.” The public has the right to know what the status is of this case. It has been dragged out for nearly three years by SANRAL, and besides this statement by them, we know of no progress or court case dates for the prosecutions to get underway.

OUTA is busy assessing the content of SANRAL’s 2016 annual report in which we’ve identified a number of concerns and anomalies. We will expand on them in due course. But we do find the following statement in the report rather absurd: "The continuation of the legal prosecuting process, civil and criminal, for outstanding GFIP debt is expected to have a significant impact on the collection of debt, more so than what the previous discounts offered had.” Last year SANRAL said their forthcoming discount dispensation (Less60 campaign) would have a meaningful impact on their ability to claw back a large part of the e-toll debt. In actual fact, a dismal and extremely low amount was generated. We believe SANRAL’s reliance on its current legal process will be just as ineffective.

It also would appear that the Auditor-General is not holding SANRAL accountable for the failed e-toll scheme or the road agency’s inability to recover the debt.

Furthermore, OUTA is concerned about the Auditor-General’s statement (As disclosed in note 45 to the financial statements) that “(SANRAL’s) Less60 campaign and SANRAL’s successive auctions up to March 2016 have ensured that the project can continue and the uncertainty whether the tolling of the GFIP will continue as a going concern, has been removed.” The Less60 campaign was a dismal failure, so we see no relevance of this reference in the Auditor-General’s statement.

Furthermore, SANRAL’s ability to raise bonds throughout the 2016 financial year was limited relative to the bond auctions of the past and the interest rates offered to seduce participants. “SANRAL’s bond raising activity and abilities are a very different matter to the failed e-toll scheme’s lack of ability to raise the money needed to pay back the GFIP Bonds,” says Duvenage, adding that the AG’s statement does not make sense. “It almost implies that because SANRAL are able to raise more debt through bond auctions, there is no problem with the low compliance of the e-toll scheme.”

OUTA maintains that SANRAL’s risk is actually higher than ever before in relation to the failed e-toll scheme. Currently, less than one in five people are paying their bills, and even the one in five are doing so under duress. The compliance levels continue to decline. How then is it possible for the AG to state that "the uncertainty whether the tolling of the GFIP will continue as a going concern, has been removed”?

Issued by OUTA