SANRAL cost to South Africa is unacceptable

"Irregular expenditure is intolerable, regardless of the excuses,” says Rudie Heyneke, OUTA’s Portfolio Manager for Transport.

“Variations from supplier standards should not become the norm and SANRAL’s internal audit processes need to be robust to overcome these issues.”

SANRAL’s finances were discussed by Parliament’s Standing Committee on Public Accounts (SCOPA) this week, with the committee raising concerns over the high irregular, fruitless and wasteful expenditure and the possibility of financial laws being flouted.

“Last year it emerged that SANRAL had outsourced its internal audit function to an external audit company. SCOPA found this unacceptable and we trust that SANRAL has rectified this situation and developed this competence,” says Heyneke.

“SANRAL’s 63% decrease in irregular expenditure may appear to be significant, but R424 million is still unacceptably high. Over the last five years SANRAL cost the taxpayer R10 billion rand in irregular expenditure.

“South Africa cannot afford this.”

Although the Organisation Undoing Tax Abuse (OUTA) appreciate SANRAL’s efforts to promote transformation and to include more SMMEs in its contracts, the onus is on SANRAL to ensure that these SMMEs are qualified and competent to perform the tasks. Without a thorough audit process SANRAL (and thereby the public) will always pay the price and will be unable to reduce fruitless and wasteful expenditure. Contracting SMMEs to conduct routine road maintenance projects does not give SANRAL license to deviate from the Public Finance Management Act.

OUTA expects that with the decrease in e-toll fees collected by SANRAL, the prescription of unpaid e-tolls will increase SANRAL’s impairments by another R2 billion this year, following the R3.6 billion impairment reflected in its 2017 financial statements. This will place SANRAL at risk of further downgrades and more bailouts from National Treasury.

OUTA commends the work of SCOPA and the committee’s robust engagements with all SOEs. We hope that the work of SCOPA will create an awareness with SANRAL and other SOEs which helps to provide taxpayers with value for the taxes they pay.

“We trust that SANRAL’s new Chairperson will play a far more robust role in holding the executive to account than the relaxed conduct of Roshan Morar,” says Heyneke.