WHY IS OUTA TARGETING GFIP CONSTRUCTION COSTS?
A year ago in February 2016, OUTA released a position paper wherein it benchmarked the cost of SANRAL’s Gauteng Freeway Improvement Project (GFIP) to that of a number of international case studies. The exercise revealed that the rest of the world was able to build between two and three roads for every one road that SANRAL built.
At the time, OUTA also conducted a high level costing exercise of the GFIP project and claimed that SANRAL had grossly overpaid by approximately R10,8bn when it paid R17,9bn for the Gauteng freeway network upgrade between 2008 and 2012.
SANRAL chose to denounce OUTA’s paper by seeking to punch holes into some of its findings and questioned its methodology of benchmarking as a futile exercise. In so doing, SANRAL attempted to dismiss OUTA’s entire report. However, OUTA responded that SANRAL made serious mistakes in trying to denounce the overarching claim that the R17,9bn price-tag of the GFIP was not fair value.
SANRAL lost a great opportunity a year ago to deal with this issue in a constructive manner. Instead of working with OUTA to explain or unpack our concerns, they chose to be adversarial and to thwart attempts to obtain all the tender documents and details pertaining to the project.
Subsequently, OUTA conducted wider and deeper research into this matter over the past year and today, we release an updated position paper titled: “The Road to Excess: A Paper on High Pricing, Collusion and Capture of National Road Construction.”