N2 tender contract: High Court reprimands Sanral | Infrastructure news

The Durban High Court reprimanded Sanral for awarding a contract to a company that submitted a substantially higher bid than a rival to manage and operate part of the N2 South Coast.

The R165 million contract – the awarding of which the court ordered Sanral to reconsider – represents small change compared to Sanral’s debt of R37.5 billion but is “worrying”, said Wayne Duvenage, chairman of the Opposition to Urban Tolling Alliance.

“It makes you wonder whether other larger tenders should not also be investigated,” said Duvenage yesterday.

The alliance has spent months campaigning against the implementation of e-tolling on Gauteng’s freeways. The Gauteng Freeway Improvement Project alone contributed R20 billion to Sanral’s debt .

Ratings agency Moody’s said Sanral has debt equal to five times its annual revenue.

If income from e-tolls is not earned by October next year, Sanral “will experience significant financial pressure”, said Kenneth Morare, Moody’s lead analyst.

The alliance will square off against the Treasury in the Constitutional Court on 15 August. This latest confrontation should give a clearer indication of whether Gauteng motorists will be tolled.

The Treasury has injected R5.8 billion into Sanral this year. It also guaranteed 57% of Sanral’s R20 billion debt through interest-bearing bonds, indicating that the buck will stop with the taxpayer.

“We believe that Sanral’s uncertainties over e-tolling issues could make it difficult for the company in the medium term to debt-finance the operating deficits as a result of its loss of e-toll revenue,” added Morare.

John Clarke, a social worker writing a book about Sanral’s role in tolling, believes the Public Protector might be called in to investigate. “The judgment [in KwaZulu-Natal] calls into question the arbitrary way in which Sanral has applied the preferential procurement policy in awarding tenders when price is not the sole criterion,” he said.

Sanral was not available for comment. The court case involves a bid for an eight-year management and operations contract with Sanral in KwaZulu-Natal.

Tolcon Lehumo’s bid for the eight-year contract was priced at R165 million whereas the Toll Collect Consortium’s bid was significantly cheaper at R156.4 million.

Sanral decided that Tolcon Lehumo’s policy of preferential procurement made its bid the most favourable and awarded it the contract on 17 June last year.

Source: TJ Strydom (times live)

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