Media Releases

Inside OUTA November

Dear OUTA Members and followers

We live in interesting times indeed. The strong winds of political change are blowing not only here in South Africa, but internationally with Donald Trump’s presidential victory in the USA. With much speculation about his impact on the world stage, Zuma will be giving a sigh of relief as the attention is focussed away from him, at least for a few days.

But at OUTA we remain focused on President Zuma and his connected cronies, as we tackle the corruption and maladministration that will now become more evident as his house of cards is starting to collapse.

History abounds with fallen political leaders who were trounced by a populace who resisted the charades of deception, cronyism and blatant theft of taxpayers funds. Zuma’s legacy will be another example of what happens when political leaders place their own interests ahead of that of the nation.

The NPA’s recent Gordhan debacle will be a bridge too far for President Zuma, and one must now ask what he was thinking when he allowed NPA head Shaun Abraham to ply his trade in the manner he did.

The overwhelming support by the public who rose to Pravin’s defence, is a sign of a growing participative democracy.  The people are getting restless and this is causing many within the ruling party to stand up to their leaders. The signs of meaningful change abound.

However, Zuma has resilience. Past encounters will show that after all the hype, headlines and hysteria has died down, the Commander in Thief will live on and retain his key appointees, to ensure his grip and control in the areas where lucrative and easily plundered contracts reside.

And this is why OUTA exists and thrives, fearlessly gathering evidence and challenging the abuse of authority by those in government and state institutions. We will continue to hold them accountable for their transgressions, corruption and wasteful expenditure.

In this edition we will update you  – amongst other matters – on the latest e-toll developments. We will also point out some of SANRAL’s dubious accounting practices in their recent annual report and unpack a few other matters we are focusing on.

OUTA’s internal structure evolves

In our journey to achieve our vision of challenging the abuse of authority on a wide variety of issues, our structure will continue to evolve, ensuring scalability, sustainability and effectiveness.

The introduction of dedicated Portfolio Managers to manage multiple campaigns and projects will lead to new appointments to ensure accountability for the advancement of the various cases we are working on.

Project management entails a host of activities, from coordinating research and investigation, to working with the media and content production teams, as well as working with OUTA’s internal and external legal teams when case building is undertaken.

OUTA’s work requires resilience and an ability to stay the course as many – if not most – of the cases we work on take time to reach their respective outcomes. Doing so requires people, good people, effective people and the right leadership.

Once again, we thank you, the active citizens of South Africa, for your ongoing support and monthly contributions without which we could not do the work we have set out to do.

Not sure what OUTA is, what we do or how we do it? Please watch this short video and share the link with those you know who may want to play their part in contributing to OUTA’s success.

Wayne

Introducing Ben Theron

OUTA has appointed Ben Theron as Portfolio Director for Transport to tackle the many pertinent issues involving corruption and maladministration within the transport sector.

Ben has an interesting and varied history of appointments and achievements, spanning from being a project manager on the Reconstruction and Development Programme (RDP) in President Mandela’s office. His extensive experience in project management saw him through a long stint with Telkom and heading up its Western Cape division, as well as a secondment to South Western Bell in Dallas,Texas. He also worked as project manager on the trans-frontier parks in the Department of Environmental Affairs and Tourism (DEAT). More recently he was involved in the Electronic Toll Collection joint venture as chief operations officer (COO).

“Working under President Mandela and alongside former minister Jay Naidoo, who was the minister responsible for the RDP in the president’s office, I learnt that it shouldn’t be about oneself, but about the future of your country,” Ben says.

Ben holds an MBA degree from the University of Pretoria and with his vast project management experience and skills, along with his activism for change, we believe OUTA is significantly strengthened by Ben’s appointment to the team.

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While former public protector Thuli Madonsela’s State of Capture report on state capture has highlighted the extent and seriousness of this worrying phenomenon, it has been around for some time and more so since Jacob Zuma became the president eight years ago.

State Capture happens when power and greed co-exist to take advantage of state expenditure for personal gain. The World Bank’s Joel Hellman has defined it as “the efforts of firms [and individuals] to shape the laws, policies, and regulations of the state to their own advantage, by providing illicit private gains to public officials”.

It is not a uniquely South African phenomenon, but in South Africa it has reached epidemic proportions, a fact underlined by the public protector’s report. It cites many examples of undue influence over matters of the state by the now infamous Guptas. But while state capture may be synonymous with Zuma and the Guptas, there is much more capture taking place in our government and state owned entities that go well beyond Zuma and his henchmen.

The capture of state spending is an illness that has beset our national, provincial and local governance structures, getting worse over the years, with less state funds reaching their intended destination. Today, very few state and local tenders escape the unscrupulous ‘consultants’ and middle men – often under the guise of transformation – to siphon off money, often more than the original projects were priced at.

The lucrative tax plundering takes place where the big capital expenditure and spending happens, and entities such as Eskom, SANRAL, SAA, SABC, Prasa and others are known plunder pots for the connected.

OUTA has for some months been investigating the entities which feature in Thuli Madonsela’s report. Some of these are:

  • Eskom: The Ingula Pumped Storage Scheme is but one example of huge cost and time overruns. The cost of the Ingula Main Underground Works (MUW), which forms only one part of this scheme, was originally quoted at R5,9 billion. However, the cost to the taxpayer has shot up to around R13,3 billion and further costs to completion will add another R1,5 billion. Information which OUTA and several journalists have, has exposed how the fat cats get into these projects where they escalate costs through delays and unmanaged expenditure sign-off, penalty pay-outs and so on.
  • SAA: By exposing the BnP Capital finance deal, OUTA showed how small boutique companies get fat on shocking board decisions. Not only did we manage to stop this deal and save taxpayers millions, but we also exposed the board of our state carrier as deliberately not acting in the airline’s and public’s best interest. Our investigation will reveal and in due course hold accountable those who are delinquent in their fiduciary duties.

We have also alerted SCOF (Parliament’s Standing Committee on Finance) of misleading information provided to them by SAA’s management during their recent presentations to Parliament.  The Chairperson of SCOF welcomed our input and will be challenging SAA on this issue in due course.

  • SANRAL: OUTA was born from its fight against the irrational e-toll scheme and this fight continues, with e-toll compliance now down below 18% of road users in the region. Our revised expose on SANRAL’s road construction costs shows how the rest of the world is able to build between two and three roads for every one that SANRAL builds. Simply put, South Africans are being ripped off. OUTA will keep on exposing and challenging the state’s role going forward.

The extent of state capture at other SOE’s like Prasa and the SABC is rife and also receives our attention. Action on this will reveal itself as our investigations progress and more facts emerge. We will not allow transgressors to escape.

 

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In his recent Medium Term Budget Policy Statement (MTBPS), minister Pravin Gordhan mentioned concern for SANRAL’s growing debt, currently at R35bn. His mention thereof was a tacit recognition that the e-toll scheme has not gone according to plan. In OUTA’s view, it has failed dismally.

Gordhan also said that government needs to proceed with tolling to fund major freeways, otherwise “difficult trade-offs will need to be confronted to avoid a deterioration in the national road network.”

It is now six years since the public outcry over e-tolls started, and despite multi million rand marketing campaigns and threats of summonses, almost 3 million motorists have defied the scheme and refused to be bullied into paying for the debacle.

We remain confounded by Government’s decision to hold onto a grossly failed plan, and can only put this down to two reasons. Firstly, there is still several millions of rands flowing into the collection pot from the roughly 18% compliant road users (mainly corporate entities) who continue to religiously pay their tolls.  This revenue stream is being merrily enjoyed by a number of connected companies, with nothing going into the bonds for the tarmac.  Secondly, Government’s capitulation on this decision will signal a massive victory for the people. It could be said that rather than eat the humble pie of a poor decision, they will continue to pretend that the “user pay system is here to stay.”

We are of the opinion that e-tolls have become virtually unenforceable. Therefore we call on Government yet again to stop the rhetoric of revisiting the system, and make the only decision possible: cancel the scheme.

Since Sanral began its attempt to summons the defaulting motorists (all 6500 of nearly three million) in May this year, OUTA launched its defensive challenge which will ultimately show that e-tolling is not only irrational and unworkable, but that it has been introduced unlawfully. The details and conditions of this court challenge are still being thrashed out between OUTA’s and SANRAL’s legal teams.

Last week however, SANRAL started with another round of their notorious intimidating SMS messages, notifying road users of summonses to be delivered by the sheriff. OUTA’s contributing members are reminded that if they receive a summons, they are to contact OUTA (www.outa.co.za), and we will do the rest in their legal challenge of Sanral’s e-toll invoices under OUTA’s e-Toll Defence Umbrella.

Anyone can join OUTA at any time at www.outa.co.za.

 

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SANRAL recently announced they will be withdrawing the civil damages claims of between R600 and R760 million each lodged against several listed construction companies. The claims arise from collusion and bid-rigging on tenders for the Gauteng freeway project (GFIP). Summonses were served in May on WBHO, Murray & Roberts (M & R), Concor, Group Five, Basil Read, Stefanutti Stocks and Raubex. (Concor merged with M & R in 2006).

For some strange reason, SANRAL reached a settlement through the Presidential Infrastructure Coordinating Commission (PICC) and the SA Forum of Civil Engineering Contractors with the collusive construction companies. This effectively pardoned them from their debt to society. In exchange these companies agreed to collectively contribute R1,25 billion over the next 12 years to a fund to be established for socio-economic development. They also agreed to undertake further transformation initiatives.

OUTA is astonished by SANRAL’s decision to withdraw civil damage claims against firms who were fined a collective R1,46 billion for what the Competition Commission termed “rampant” collusive tendering related to projects concluded between 2006 and 2011. These penalties were the result of the Construction Fast-Track Settlement Process, initiated by the commission in February 2011, in which firms were incentivised to make a full and truthful disclosure of bid-rigging. The construction giants were amongst the 21 companies who admitted to collusion or anticompetitive behaviour in over 300 public- and private-sector projects worth an estimated R47-billion.

Allowing them to get away with the equivalent of a mere slap on the wrist, is an insult to the taxpayers of South Africa. We will once again have to pay the price for what amounts to corruption. Unfortunately, there is little repercussion for corruption in South Africa.  OUTA will challenge this decision.

 

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We are currently 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.

SANRAL annual report

Here is just one of many absurd extracts from SANRAL’s recent annual report: “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 (the Less60 campaign) would have a meaningful impact on their ability to claw back a large part of the e-toll debt. But in actual fact, a dismal and extremely low amount of R145 million – from a total debt of R5,9 billion – was collected. This is fail with a capital F.

We believe SANRAL’s reliance on its current legal process will be just as ineffective.

We also find it worrying that the Auditor-General is apparently not holding SANRAL accountable for the failed e-toll scheme or the road agency’s inability to recover the debt.  We see this as blatant abuse of our tax money.

We are also concerned about the Auditor-General’s statement 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, and it almost seems that the AG’s is implying 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.

We strongly disagree with the AG’s statement that “the uncertainty whether the tolling of the GFIP will continue as a going concern, has been removed.” OUTA maintains that SANRAL’s risk is actually higher than ever before, and taxpayers should be spared a further waste of their money.

 

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Corruption is a serious threat to the rule of law, the stability and security of societies and our constitutional values. Central in the fight against corruption and mismanagement of public funds, is the need for ethical behaviour and good governance of all state owned enterprises (SOE’s). OUTA aims to promote this by providing the public with a safe, secure whistleblowing platform.

Whistleblowing is a term used when an individual discloses information relating to wrongdoing, corruption or malpractice and/or the possible covering up of these actions. OUTA is specifically interested in information relating to the abuse of taxpayers’ money, as we want to hold government entities accountable to the standards and policies they profess to be governed by.

To do this, we aim to collect as much information as possible when investigating alleged corruption. Unlike many other organisations claiming to be corruption watchdogs, we don’t only expose corruption, but also investigate it thoroughly. We are also committed to follow the required legal processes to ensure successful litigation.

For this reason, we have put together a program specifically dedicated to whistleblowers. Through a cloud site hosted in Australia, OUTA ensures safe and anonymous whistleblowing. Once a user fills in a form and submits documentation to this platform, all traces of their IP address and other location information is wiped from the servers, ensuring total anonymity.

In South Africa the Protected Disclosures Act (no 26 of 2000) – amongst others –  makes provision for procedures in terms of which employees in both the public and private sector who disclose information of unlawful or corrupt conduct by their employers or fellow employees, are protected from occupational detriment. We will ensure that whistleblowers remain anonymous and legally protected, and that the matter will be handled in a sensitive and confidential manner. We will also do everything possible to ensure that all whistleblowing interviews and meetings comply with the Protected Disclosures Act.

Furthermore, OUTA saves a lot of time in the fight against corruption by submitting applications for the right information under the Promotion of Access of Information Act (PAIA) to various entities. In this way, we can obtain and make available documents that should be freely available to the public.

 

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Eskom – The fight against high tariff hikes continues

OUTA’s challenge against Eskom is to participate at the Multi-year price determination (MYPD) processes and present compelling reasons and information as to why Eskom should not be allowed to receive the high tariff increases they seek.

The State Capture reports has exposed Eskom’s abuse of power. OUTA will pursue further action against Eskom to ensure they do not abuse their monopolistic stranglehold on the nation’s power supply.

The extent of the work we are doing in our challenges against Eskom will be revealed in due course.


OUTA’s Challenge against the Nuclear Issue

OUTA is leading civil society’s call for Government to halt its new energy build programs, including Nuclear, until such time as an updated and credible Integrated Resource Plan (IRP) for electricity is concluded.  Recent research by the CSIR has revealed that the nuclear and new coal powered plants are not the solution to our future energy needs.

More about OUTA’s work in this regard will unfold in due course.

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INSIDE OUTA ARCHIVE

Inside OUTA Archive
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