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Friday / 14 June 2024
HomeNewsThe fight to expose toll roads in South Africa that are hiding their profits from the public

The fight to expose toll roads in South Africa that are hiding their profits from the public

South Africa has a lot of toll gates on its highways, but it is unclear how much money is being made off of the travellers passing through many of these routes on a daily basis.

While the majority of the country’s highway toll roads, including parts of the N1, N2, N3, N4, and N17 are managed by the tax-payer-funded South African National Roads Agency (Sanral), large sections of other roads are maintained by private concessionaires that do not disclose their profits.

The Organization Undoing Tax Abuse (Outa) has flagged this as a point of concern, arguing that these concessionaires may be making excessive profits off the backs of the millions of road users in South Africa.

A fight for transparency

Earlier this month, it was announced that many of South Africa’s toll gates would be receiving a price hike of 6.25% effective from 1 March 2024.

The price increases seen across the country’s highways have been a contested point for Outa as its executive director, advocate Stefanie Fick, said these fees have risen by roughly 25-28% between 2018 and 2023.

“The toll fees increased significantly (more than CPI in some instances) over the years, and Sanral’s financials show that they do not get a significant amount of money from the concessionaires,” she said.

The organization is currently involved in three court actions against Sanral relating to the revenue of its Bakwena, N3 (N3TC), and Trans African (TRAC) concessionaires, which manage a combined 29 toll gates.

You can see a map outlining South Africa’s highways and toll gates, including which groups are responsible for a particular road section, in the map below:

One case involves the N3TC, which is responsible for the N3 tolls between Heidelberg in Gauteng and Cedara in KwaZulu-Natal, and cost R300 for light passenger vehicles in 2023.

Toll fee increases are determined by the transport minister and are calculated using a formula in the concessionaires’ contracts, but Outa has suggested that the recent hikes do not appear to line up with what the formula should produce and that it had commissioned an actuary to determine whether the increases are, in fact, valid.

While the group does not take issue with these companies making a profit, it does argue that excessive profits to the detriment of motorists are not justifiable.

“If the financial burden of ordinary road users can be alleviated by exposing excessive profits, we have a duty to expose this,” stated Fick.

It is also important to note that, due to issues with South Africa’s rail network, a much greater quantity of goods are now being transported via trucks that must pay to use the nation’s toll roads.

While heavy vehicles do cause more damage to the road surface, requiring more maintenance, Outa believes that the profits being made from these vehicles more than offset the repair costs.

“In the case of these public-private concessionaire partnerships, where there is a lack of transparency, these are opportunities for significant unnecessary enrichment,” it said.

“Outa believes it is imperative that the State ensures transparency of the revenues and costs incurred by these concessions, on behalf of the public.”

The group launched a Promotion of Access to Information Act (PAIA) application in 2019 to have Sanral share its toll revenue information on the N3TC.

However, this was dismissed by the Pretoria High Court in late 2023, which argued that there was no irregularity in the contract between Sanral and the N3TC and that the motion put forward lay in the perception that the N3TC, in performing its duties under the contract “may well have made a profit.”

It is not illegal for a private third party that has a lawful contract and awarded tender with the state to make a profit, and the court ruled that section 46 of PAIA applies only to contraventions or failure to comply with the law or public safety or environmental risk – none of which apply in this case.

“The making of profit, in a private company, is an everyday commercial consequence and is not in and of itself a matter which requires disclosure in the public interest,” it said.

Outa was not granted leave to appeal the High Court ruling, but is now drafting papers to make a petition to the Supreme Court of Appeal, where it will argue that public interest needs to be given greater consideration in the ruling.

“We believe that the public interest should always enjoy preferential and elevated status above that of private interest — irrespective of who the parties are,” said Fick.

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