Sanral slammed for over R1.6bn irregular spend

Cape Town – The South African National Roads Agency (Sanral) has been slammed by MPs in Parliament for being vague about its more than R1.6bn irregular expenditure.

The state-owned entity, which falls under the auspices of the Department of Transport, appeared before the standing committee on public accounts (Scopa), Parliament’s watchdog over the public purse.

The biggest contributing item to Sanral’s irregular expenditure in the 2015/16 financial year was its procurement model for routine maintenance projects, which amounted to almost R1.5bn.

In 2013 already, the auditor-general declared the means by which Sanral has been procuring road maintenance was non-compliant with the Preferential Procurement Policy Framework Act (PPPFA), which at the time amounted to R2.4bn.

Sanral, however, said in its response to Scopa that the PPPFA doesn’t stipulate that public entities need to procure the "lowest acceptable" price.

"The definition of the ‘lowest price’ is therefore open to conjecture," it said in its presentation.

Sanral board chairperson Roshan Morar, however, came under fire for this “interpretation” and MPs said the entity was not at liberty to differ with the auditor-general’s opinion.

ANC MP Ntombovuyo Mente rebuked Sanral for not explaining in their documentation about how the irregular expenditure came about.

"You merely sent us a spreadsheet with project numbers that say nothing."

She asked Sanral why it carried on with its method of procuring road maintenance services despite the fact that the auditor general had declared it irregular in 2013.

Sanral’s Chief Financial Officer Inge Mulder said the entity couldn’t cancel its existing procurement contracts, as it would have resulted in legal action.

"The contracts in place were left to run their course in order not to incur cancellation claims. But new contracts have been awarded at the lowest price," said Mulder.

Sanral said in its investigation that the value of the remaining contracts is reducing from R1.5bn 2015 to R1.1bn in 2016.

Vincent Smith (ANC) also weighed in on Sanral’s "vague explanations", saying Scopa couldn’t "let Sanral go" without getting a sense of what is going on.

"You mention a conflict of interest to the tune of R1.3m and just tell us there’s a forensic investigation going on. That’s not good enough. There’s a disdain for Parliament in your responses," Smith said.

He was referring to the matter in Sanral’s annual report where an employee failed to declare a conflict or interest on three projects that had a combined value of R1.323m. According to Sanral the incidences are being investigated forensically.

Sanral also awarded tenders for contracts without submitting original or certified BEE certificates (although electronic copies had been received). The combined value of the contracts was R39.5m.