Africa's Public Procurement & Entrepreneurship Research Initiative – APPERI


Congress of South African Trade Unions

DA asks protector to probe e-tolls ‘link’ to arms deal companies


May 3rd, 2012

Probe demanded into possible connections between companies involved in arms deal and the company that runs the e-tolling system.

THE Democratic Alliance (DA) has asked Public Protector Thuli Madonsela to investigate controversial contracts relating to the collection of e-tolls in Gauteng.

“Suspicion is high that politically connected people may have benefited from the toll companies contracted to the South African National Roads Agency (Sanral),” DA MPL Jack Bloom said in a statement on Thursday.

He added: “Widespread public concern needs to be allayed by a full investigation by the public protector.”

On Wednesday, the Congress of South African Trade Unions demanded an investigation into possible connections between companies involved in South Africa’s arms deal and the company that runs the controversial e-tolling system on the Gauteng Freeway Improvement Project.

While they are not conclusive of wrongdoing, links between the corruption-tainted arms deal and the unpopular e-tolling plan will add to the stiff opposition that the government is facing from business, unions and civil society.

Websites have been buzzing with allegations of links between Swedish companies involved in the arms deal and the Vienna-based Austrian company Kapsch TrafficCom.

Kapsch TrafficCom is the largest shareholder in the Electronic Toll Collection (ETC) joint venture, which won the R1,1bn project from Sanral in 2009, along with Traffic Management Technologies, a local company.

“In giving the background to his interdict against the e-tolls, Judge Bill Prinsloo criticised Sanral for its secrecy on the contract with the ETC consortium,” Mr Bloom said on Thursday. “There are also 35 sub-contracts with ETC, all with confidentiality clauses.”

On Saturday in the North Gauteng High Court, Judge Prinsloo granted an urgent interdict, brought by the Opposition to Urban Tolling Alliance, to stop the e-tolling system so that a full court review could be carried out to determine whether it should be scrapped.

The judge said that while he realised Sanral would suffer huge financial losses, the public would also suffer hardship if the controversial project went ahead.

The ETC consortium will install and operate the toll system on the upgraded highways. When the contract was signed, Kapsch — both its Austrian and Swedish arms — held 65% of the company and TMT owned 35%.

Sanral CEO Nazir Alli said last year the Kapsch consortium had tendered the most competitive bid, which also had the largest South African composition.

However, the next year Kapsch TrafficCom “invested” in TMT, which resulted in the company owning 57% of TMT.

The Swedish and Austrian arms of Kapsch owned most of the ETC consortium, but it appears the Swedish unit owns the lion’s share. Kapsch TrafficCom holds 40% of ETC while Austrian principal Kapsch has the remaining 25%.

The Swedish arm was previously part of Swedish manufacturing company SAAB and later became part of Kapsch AG.

SAAB, which sold 28 Gripen jet fighters to South Africa in the arms deal, sold a subsidiary called Combitech Traffic Systems to Kapsch. That company had already been involved in several toll-road contracts, including Marianhill Plaza in Durban.

One of its partners in these toll contracts was Kobitech, owned by Schabir Shaik, who was jailed for arms deal corruption. Most of Shaik’s business interests were in toll roads and electronic licensing contracts handled by the Department of Transport.


ANC mulls legislation to supersede mining contracts – official

Mining Weekly

JOHANNESBRURG – South Africa’s ruling African National Congress (ANC) wants to forge an economy in which its natural resources best serve the country, says the head of the party’s task team formed to study a proposal to nationalise mines.

National needs could take precedence over mining companies’ desire to export so that the country’s coal, iron-ore and other mineral reserves benefit the continent’s biggest economy, Enoch Godongwana said in an inter- view in Johannesburg.

South Africa’s policies should be guided by the extent to which we can use our resources to achieve a number of goals, among them growth and redistribution, Godongwana said.

Legislation that supersedes any contract you have to ensure the assets meet the country’s needs is an option,” he said. “In certain circumstances, national interest must prevail.”

Citigroup last year valued the country’s mineral resources at $2.5-trillion, the highest of any nation. Leaders of companies including AngloGold Ashanti, Africa’s biggest gold producer, and Standard Bank Group, the continent’s largest lender, have said nationalising mines will curb growth and hinder job creation in a country where one in four is unemployed.

South Africa has the world’s largest reserves of platinum, 30% of the world’s gold, and supplies coal to Indian and European power stations. Anglo American, Rio Tinto Group and BHP Billiton have assets in the country, which is also home to two of the world’s four biggest gold miners and the two largest platinum producers.

The ANC’s Youth League and the Congress of South African Trade Unions, the country’s largest labor grouping and a party ally, say that the ANC will adopt nationalisation as a policy at its national conference next year, and is only looking into the details of how best to do it. The study was agreed to after repeated demands by the youth wing, which is led by the 30-year-old Julius Malema.

If there are some people who say we’re going to nationalise and we’re just looking at the modalities, I’d suggest that person is insulting the intelligence of ANC delegates,” said Godongwana, who opposes State control of industry. “I don’t believe we should take on managing more than we can.” Read more.

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