It’s long been known that South African motorists have been fleeced when it comes to road construction costs, but by how much has always been a matter of speculation.
Now we have a better idea. The Gauteng Freeway Improvement Project (GFIP) to upgrade the highways between Joburg and Pretoria, originally costed at R4,6bn in the mid-2000s for a 340km upgrade, ended up costing just shy of R18bn for 193kms. After a year-long study involving whistleblowers, road engineers and quantity surveyors, Organisation Undoing Tax Abuse (Outa) concluded that the 193km freeway improvement project should have cost no more than R8bn, even allowing for cost escalations and other contingencies. That’s a R10bn overcharge, enough to build 40 Nkandlas (the name of President Jacob Zuma’s taxpayer-funded private residence in Kwazulu-Natal).
The client in this case was none other than SA National Roads Agency (Sanral), which paid an average of R86.6m per kilometre, between two and three times what comparable roads in Africa (and SA) would cost.
If the R10bn cost overrun is correct – and several industry insiders claim it is – how did the construction companies pull it off? And why are no construction executives in jail for this swindle?
In 2006 there was a secretive road contractors meeting attended by Basil Read, Concor (part of Murray & Roberts), Haw & Inglis, Grinaker LTA and Raubex where the colluders agreed to allocate tenders for the construction of roads. At this meeting it was also agreed that those firms not interested in winning tenders would nevertheless submit “cover bids”, which are sham bids intended to lose while lending legitimacy to the tender process. The losers would receive compensation, or “loser’s fees”, from the winners.