Durban — The scale of profits that the N3 Toll Concession makes on its 30-year contract will remain a secret for now after the Organisation Undoing Tax Abuse (Outa) lost a court bid to get financial information from the SA National Roads Agency (Sanral).
However, Outa will be taking the matter on appeal.
Outa had approached the Gauteng High court, Pretoria, wanting N3 Toll Concession (N3TC), a private company, to disclose how much it was profiting from collecting toll fees on behalf of Sanral on the N3 highway between Heidelberg and Cedara.
The route is the country’s busiest and most profitable as it connects the major economic hubs of Johannesburg and Durban.
The court this week dismissed Outa’s application which had challenged Sanral’s refusal to provide key documents requested in a Promotion of Access to Information Act (PAIA) request.
Judge Anthony Millar rejected the application, saying the PAIA did not oblige private companies contracted to the state to disclose their profits.
“There is no provision in our law that [says] any private third party which contracts with the State is prohibited, within the confines of a lawfully made and awarded tender, to make a profit. In its terms, S46 of PAIA applies only to contraventions or failure to comply with the law or public safety or environmental risk. None of these apply in the present case,” read the judgment.
Outa had claimed that N3TC’s financial statements were in the public interest as they involved taxpayers’ money.
The judge said this was not the case since Outa was not demanding the documents based on any financial misconduct on the part of N3TC.
“Outa’s claim that the disclosure of the disputed documents is in the public interest is, properly construed on the case before me, predicated entirely not upon any irregularity with the contract that was concluded in 1999 between Sanral and N3TC but rather upon the perception, after an investigation conducted some 20 years after the fact, that N3TC in the performance of its obligations in terms of the contract may well have made a profit,” he said.
Outa executive director advocate Stefanie Fick said it was unfortunate the judge had not taken public interest into consideration as the judgment upheld “the veil of secrecy when it comes to private companies contracting with the state”.
“We believe that the public interest does not receive the attention it ought to in PAIA processes, especially in the light of contracts between the private sector and the state.
“We believe that the public interest should always enjoy preferential and elevated status above that of private interest – irrespective of who the parties are,” she said.
Fick said there was a suspicion that N3TC was making a huge profit from motorists.
“It is a big concern that there is a possibility that N3TC earns excessive profit to the detriment of road users who fork out the toll fees. These toll fees have increased about 25%–28% since 2018 and if the financial burden of ordinary road users can be alleviated by exposing excessive profits, we have a duty to expose this,” she said, adding that ordinary motorists travelling from Pietermaritzburg to Heidelberg on the N3 had the benefit of a well-maintained road, but paid nearly R300 in toll fees. Heavy vehicles paid substantially more.
“We believe this cost could be substantially less,” said Fick.
In its 2022/2023 integrated report, Sanral disclosed that it had collected R3.885 billion from toll roads, but its report did not disclose how much each toll road made and how much the companies contracted to do collection made.
Sanral spokesperson Vusi Mona said the judgment was a lesson to Outa to not make unfounded allegations that Sanral might be involved in “nefarious activity”.
“We are pleased that the court has now pronounced decisively on these baseless attempts to impugn the reputation of Sanral,” said Mona.
Outa CEO Wayne Duvenage said when the companies received the contracts 23 years ago, there were smaller volumes of vehicles passing through toll gates. The number had doubled as a result of more goods being moved to roads from the rail network.
“Every year the tolls go up. Imagine you submit your tender with a projection of what the traffic looks like and suddenly it doubles because all the freight has moved from rail to road,” he said.
Outa was not against companies making profits, but these should be “reasonable”.
Independent on Saturday