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Tag: Sanral

The Truth about SA Road Network Deteriorating Condition

Business consulting firm Frost & Sullivan, in a new study, shows that more than half (54%) of the country’s unpaved road network is in poor to very poor condition, while approximately a third (30%) of the paved network is in poor to very poor condition.

South Africa’s road network is the largest and longest interconnected road network in sub-Saharan Africa, and covers approximately 750,811km of roads. The South African National Roads Agency (Sanral) is responsible for all major highways, regional departments oversee provincial as well as regional routes, while local municipalities oversee smaller urban roads that connect national and regional roads to the major network. Provincial road funding, for the most part, comes from the national budget in the form of the provincial road maintenance grant (PRMG).

“The provincial road network condition has been on a steady decline since the early 90s due to several reasons, including curtailed funding allocations to roads and the shrinking project output by the public sector,” said Frost & Sullivan.

Frost & Sullivan added that the Eastern Cape, Free State, Limpopo, Mpumalanga, and the North West in particular are struggling with the maintenance of their respective road networks.

“Not only are both the paved and unpaved roads in danger of further degrading to poor condition, but there also exists a significant backlog of roads that require rehabilitation which is far above the available funding received by the provincial departments. With Sanral leading the revival of the industry, it indirectly incentivizes, albeit at a slower rate and smaller size, regional departments to also publish tenders.”

Tenders, however, are focused mainly on the maintenance and upgrading of regional roads rather than construction, according to Frost & Sullivan.

“We have quantified our backlogs as far as upgrades (surfacing) are concerned. The cost of our current backlogs, which are roads that are due for upgrades, is worth R23 billion. Indication of the amount of work that is still required,” said the Eastern Cape’s department of transport/

The best and the worst roads 

As with the provinces, certain municipalities are better positioned to maintain their road network than others. These include the City of Cape Town, Johannesburg, and Tshwane. However, nearly a quarter of the total metropolitan road network is in danger of degrading from fair to poor condition. Frost & Sullivan determined that the unpaved road network is in generally poor to very poor condition (54%), while the paved road network on the other hand is in better condition, with 21% being in poor to very poor condition.

As with the provincial road network, there is a considerable backlog in terms of road maintenance, construction, and rehabilitation. Despite these problems, market participants see the national, provincial, as well as municipal backlog as an opportunity rather than a downfall.

“We also have the metros, for example, the eThekwini metro in Durban. They do a good job of maintaining their metro infrastructure and are fairly reliant when it comes to tenders,” said a regional market participant.

 

Corruption Latest: Husband and wife Sanral sub-contractors bust

Pierrette De Beer, 40, Coenraad Frederik De Beer, 47, Sean Hendrik De Beer,35, Maria Elizabeth Viljoen,71, Rikus Engelbrecht (55) and Susanna Maria Fransina Engelbrecht (59) appeared at the Port Elizabeth Magistrates Court on charges of fraud, corruption and money laundering linked to a Sanral road project contract.

Two companies have also been charged, Cat Civils SA (PTY) LTD and Cumax 184 Close Corporation.

The accused have been charged with 35 counts of corruption, fraud and money laundering amounting to more than R9,7 million.

National Prosecuting Authority spokesperson Anelisa Ngcakani said that in 2015, the Penny Farthing Engineering SA (Pty) Ltd (PFE) branch in Gqeberha concluded a contract with the South African National Roads Agency SOC LTD (Sanral), to resurface the national road between Elliot and Barkly East, in the Eastern Cape.

IT WAS REALLY A FAMILY AFFAIR

PFE, as the main contractor, appointed sub-contractors to fulfill the contract. All sub-contractors appointed by PFE had to be approved by Sanral and sub-contractors were not allowed to appoint further sub-contractors without PFE’s permission.

Rikus was employed by PFE to work on the project as a general foreman. His duties included the monitoring of work progress and the verification of claims made by sub-contractors in the daily reports they had to submit.  He then submitted the reports to Coenraad who was employed by PFE as the site manager.

Pierrette, who is married to Coenraad, was the sole director of Cat Civils, a private company based in Jeffreys Bay. Sean, Viljoen and Coenraad’s half-brother, is the director of Cumax 184, which is based in the Northern Cape. Rikus and Susanna are also a married couple.

Cat Civil had a Netbank and FNB account and Pierrette was the signatory on these accounts while Coenraad allegedly had access to the FNB account.

In 2015, Ugie MacQuarry (Pty) Ltd submitted a quotation for delivery of materials to PFE which was not accepted. Coenraad was mandated by PFE to negotiate with Ugie Mac for a mutually acceptable deal.

“It is alleged that Coenraad instead falsely held out to Ugie Mac that Cat Civils, represented by Sean, was entitled to a brokerage fee for the delivery of material to PFE. The terms and conditions reached in the agreement allegedly also stipulated that Ugie Mac would pay R30 into the bank account of Cat Civils for each ton of materials delivered to PFE as commission payments to the latter for having brokered the deal between PFE and Ugie Mac. Cat Civils had no business relationship with PFE and was not entitled to receive any payments,” Ngcakani said.

A SELF APPOINTED SITE MANAGER

From 30 March 2016 to 16 November 2016, Ugie Mac allegedly paid a total of R656 216.62 to Cat Civils.  On 26 January 2016, Ibhabhatane Trading was appointed as a sub-contractor by PFE for the road project.

Coenraad allegedly excluded the appointed quantity surveyor from performing oversight duties for the road project and allegedly unlawfully appointed himself and Rikus to attend to the payment certificates of Ibhabhatane. They allegedly unlawfully took control over the invoices and draft payment certificates submitted by Ibhabhatane to PFE.

Coenraad allegedly persuaded and induced Ibhabhatane to accept that it would be in its interest to appoint Sean as Ibhabhatane’s own site agent for the Sanral road project. The advantage held out to Ibhabhatane, was that Sean was an experienced site agent who could be entrusted with the monthly compilation and completion of control sheets, measurements, and draft payment certificates required to be submitted every month to PFE.

In February 2016 Ibhabhatane appointed Sean as its site agent for the road project at a salary of about R26 000 a month. From then onwards, the function of compiling and submitting control sheets, draft payment certificates and invoices, was left by Ibhabhatane to Sean.

It is alleged that Coenraad further mislead Ibhabhatane to believe that the company had fallen behind its delivery targets and therefore was at risk of losing the sub-contract.  Consequently, the company accepted an alleged proposal by Coenraad to appoint Cat Civils on a sub-contracting basis to assist Ibhabhatane to meet targets.

HIDDEN RELATIONSHIPS AS THEY WORKED ON SANRAL PROJECTS

Ibhabhatane would allegedly pay Cat Civils based on invoices submitted. It is alleged that Ibhabhatane relied on Sean to monitor and verify the amount of work claimed for by Cat Civils.

The relationship between Coenraad, Sean, Pierrette and Cat Civils was allegedly never disclosed to Ibhabhatane.

It is alleged that Sean, Coenraad and Rikus colluded to inflate the claims submitted for payment on behalf of Ibhabhatane to PFE for work done and not done.

The total amount allegedly overpaid to Ibhabhatane was R 3 555 873.91.  Ibhabhatane allegedly paid Cat Civils R650 000.

Cumax 184 was also appointed as a sub-contractor by PFE for the road project. As in the case of Ibhabhatane, it is alleged that Coenraad, in common purpose with Viljoen, fraudulently took control of the sub-contract and manipulated claims by Cumax 184 to PFE. Coenraad and Rikus allegedly unlawfully managed the payment certificates of Cumax 184.

It is alleged that Coenraad and Rikus managed the claims submitted monthly on behalf of Cumax 184 to PFE for payment.  The claims were allegedly inflated. Between April 2016 and October 2016, PFE paid Cumax 184 a total of R6 112 282.29. This amount was allegedly inflated by R2 965 935.81.

It is alleged that Viljoen paid Cat Civils a total of R1 920 249.85.

Pierrette, Coenraad, Rikus and Susanna allegedly colluded to transfer R150 000 from Cat Civil to Susanna’s bank account as an alleged gratification payment to Rikus.

Senior State Advocate Lise Keech, did not oppose bail with strict conditions as the accused had co-operated with the Hawks. They handed themselves in for arrest to the Hawks in Gqeberha at 7am on Thursday. Coenraad was granted R8000 bail while Pierrette, Sean and Rikus were granted R5000. Viljoen was granted R3000 bail and Susanna was granted R1000. The case was postponed to  1 June 2021 at the Port Elizabeth Specialised Commercial Crimes Court.

Penalising Gauteng motorists over e-tolls is declaration of a war

The South African National Civic Organization (SANCO) in Gauteng province on Monday warned national roads agency SANRAL against reported plans to punish motorists who are not paying controversial e-tolls by blocking them from renewing annual vehicle licences.

Motorists have for years resisted paying the e-tolls to fund highway upgrades through the Gauteng Freeway Improvement Project (GFIP). The provincial government is also against the tolls, arguing that it is unfair to place the cost on just one province when the freeway network serves the entire country.

On Monday, SANCO said any punitive moves against motorists by SANRAL “will be a sign of declaring a war against SANCO, its members and the entire Gauteng community”.

The warning came after media reports at the weekend suggested the roads agency might bar e-toll defaulters from renewing vehicle licences.

“All motorists must be allowed to renew their licenses without being subjected to pay e-tolls that were imposed on the people,” SANCO Gauteng chairman Chris Malematja said in a statement.

“We are rejecting them and no one including SANRAL must try to force residents of this province to pay. We will remain ready to defend the motorists’ rights that are violated by SANRAL and some individual politicians who may be benefiting from the e-tolls scam.”

The civic gorup also urged Gauteng Premier David Makhura to honour his promise to engage Transport Minister Fikile Mbalula over the issue.

“We (hope) that he is not neutralised and his position to stand with the people of Gauteng against e-tolls remains unshaken,” Malematja said.

SANCO warned that if SANRAL pressed on with the punitive measures “residents of this province will ensure that the provincial economy comes to a standstill” by blocking movement into and out of Gauteng on the eve of Good Friday, which falls on April 2 this year, and traditionally sees a lot of inter-provincial travel for the Easter holidays.

Last week, Gauteng member of the executive council for public transport and roads infrastructure Jacob Mamabolo reiterated the provincial government’s long-standing opposition to the e-tolls.

Mamabolo said he had in November written to Mbalula registering the provincial government’s rejection of proposed Administrative Adjudication of Road Traffic Offences Act (AARTO) regulations as another method of enforcing the tolls on Gauteng residents.

Government is not letting E-toll go

The South African National Roads Agency Limited (Sanral) have been accused of using fear tactics to force motorists to pay their outstanding e-toll bills. This after weekend reports which highlighted claims by Sanral that it will now block car licence renewals for motorists who don’t pay for the controversial tolling scheme. Justice Project South Africa chairperson Howard Dembovsky however said that the threat was hardly a new tactic.

According to Dembovsky, Sanral has threatened to withhold licence renewals since the onset of e-tolling in Gauteng.  The provision has always existed in the Aarto Act for enforcement orders to be issued against any outstanding infringement, including non-payment of e-tolls, to coerce payment of the fine. Aarto has been in effect in Johannesburg and Pretoria (Tshwane) since 2008.

“Despite it being an issuing authority in the Aarto scheme, Sanral hasnot issued a single infringement notice for failure to pay e-tolls since they came into force in December 2013,” he said.

Sanral has also failed to prosecute a single motorist for not paying e-tolls, using the Criminal Procedure Act, which applies outside of the jurisdictions of the Johannesburg and Tshwane metro police departments.

“Apart from annual tariff increases, no amendments to the ‘e-road regulations’ have been published since 2015,” Dembovsky said.

Outa agreed with Dembovsky stating that the warning from Sanral was fear-mongering, and that 80% of road users in the province would not be able to renew their vehicle licences if the ‘change’ was actually enforced.  Outa maintains that Sanral does not have legal ground to withhold licences for non-payment of e-toll bills.

“Renewal of a vehicle licence can only be withheld with if an enforcement order for outstanding infringements fines has been issued against an owner/driver of a vehicle, and it hasn’t been paid. Outstanding e-toll fees is not an infringement as a road traffic offence,” it said.

Changes could be on the horizon

Sanral’s best hope to withhold licenses from motorists who fail to pay e-tolls rests in the upcoming Aarto Amendment Act. The Act retains fining for failure to pay e-toll, adds two new charge codes to enable it more specifically, and it allows Sanral to electronically serve infringement notices on alleged infringers instead of posting them using so-called ‘registered mail’.

Set for national implementation on 1 July 2021, the Aarto Amendment Act has been steeped in controversy regarding its clear objective of promoting revenue generation over road safety and placing an ominous administrative burden on motorists who are presumed guilty of any infringement.

While Transport minister Fikile Mbalula and the Gauteng provincial government have promised a resolution on e-tolls for years, Dembovsky said it is now clear that the system is not going away.

“On the face of things, what is clear is that government has no intention to scrap e-tolling and that it would rather risk triggering a vehicle licensing fees revolt than to admit that it was wrong in contriving this diabolical and convoluted scheme,” he said.

The e-tolls scheme itself faced controversy this weekend after major allegations of corruption surfaced.

An investigation by MyBroadband’s Jan Vermeulen details grave allegations against Electronic Toll Collection (ETC) and its parent company, Kapsch TrafficCom. Among the allegations are that ETC, with full knowledge of Kapsch, made payments totalling R10 million over three years to a company called ProAsh Business Services without receiving any services or deliverables from the company.

According to the allegations in the police report, ETC defrauded the South African National Roads Agency Limited (SANRAL) by misrepresenting these payments. The police reports also contain allegations that ETC and Kapsch may have bribed Zambian government officials via a local subsidiary called Intelligent Mobility Solutions (IMS).

The third allegation, contained within the documents which were submitted to the NPA, was that Kapsch and ETC had presented a falsified B-BBEE certificate to bid on a SANRAL tender in 2020.

In response to these allegations, Kapsch and ETC said that they are conducting an extensive independent external investigation and will act on the findings.

Delay on E-Toll Decision Costing SA

Kimi Makwetu, the Auditor-general, has warned that the continued impasse on Gauteng’s e-tolls has had a serious impact on the South African National Roads Agency (Sanral) and its ability to continue as a going concern.  Sanral manages over 22,000 kilometres or roads across South Africa.  Its inability to collect funding from e-tolls which form part of the Gauteng Freeway Improvement Project, is severely impacting the agency’s ability to upgrade and maintain its road network.

In its presentation to parliament on Tuesday, the auditor-general stated that the decision on a future-funding model for GFIP has still not been finalised.  The delays in the finalisation of the GFIP matter has negatively affected the financial sustainability of Sanral which had an accumulated loss of nearly R15 billion as of March 2020.  Sanral is now technically insolvent with material uncertainty that the agency can continue to operate in future,

“Sanral’s debtor’s impairment provision as a percentage of accounts receivable is still very high and increased from 90.6% to 94.8% which indicates that the recoverability of a significant portion of trade and other receivables (ie, e-toll fees) is in doubt. These events or conditions, along with other matter indicate that a material uncertainty exists that may cast significant doubt on the public entity’s ability to continue as a going concern,” Makwetu said.

Transport minister Fikile Mbalula in October said that his department is being impeded from rolling out new road infrastructure projects because of a lack of resolution around e-tolls. Mbalula said the Ramaphosa’s cabinet is set to finalise a new funding model for the project after receiving proposals from his department.  In September Sanral said that the government needed to urgently decide on the future of e-tolls in Gauteng as the coronavirus cut its cashflow.  “We’re having to scurry around to ensure our liquidity,” Sanral chief executive officer Skhumbuzo Macozoma said. Only 20% or users pay e-toll at this stage.  If cancelled, Sanral’s debt related to the Gauteng Freeway Improvement Project will jump from around R40 billion to R67 billion. South Africa’s lockdown to curb coronavirus already cost Sanral more than R620 million.

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