Analysis of Outa's Report on the Gauteng Freeway Improvement Project
The Outa report challenges the integrity of SANRAL's management of the GFIP, alleging overpayment and irregularities. SANRAL has requested substantiation of the claims, highlighting discrepancies in project length and cost estimates. Conflicting views on lane kilometers measurement and selective study usage raise questions about the report's credibility.
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Factual Inaccuracies Outas Report 12 April 2016
Introduction The report conducted by Outa acknowledges that the Gauteng Freeway Improvement Project (GFIP) was necessary for economic growth. It does not attack the quality of the infrastructure provided by SANRAL, which was the implementer of the project. It attacks the integrity of SANRAL - this attack based on a non-scientific, non-engineering study that compares generalised studies from elsewhere with the GFIP
Introduction It was stated to be the result of research conducted by Outa the researchers names and qualifications not stated. Outa concluded that SANRAL overpaid by 321% for GFIP roads although their own research calculations had a figure of 152% - more than 100% discrepancy.
Introduction On 23 March 2016 SANRAL requested Outa to substantiate its claims of irregularities in the construction and management of the Gauteng Freeway Improvement Project and to provide all information including detailed engineering reports, research and financial calculations on which allegations contained in a recently published report are based This information has not yet been received.
Introduction Outa implies that SANRAL is corrupt, incompetent and has colluded with the construction industry in their published research report. The collusive practices within the construction industry are being dealt with within the relevant structures in Government including SANRAL. The perceptions created by Outa cannot be left unchallenged by SANRAL because they are misleading the public, the media and current and potential investors.
Outa Report - Introduction Misstatements: Stated project length 185km vs actual 201km Outa statement need to compare like for like is not applied Cost estimates for structural work grossly underestimated for both quantities and rates States that lane kilometres should be used however it appears that the principle was not constantly applied Unit of measurement some inconsistencies Studies used appears to be selective and used out of context
Outa Report - Introduction Various reports, even some of those referred to by Outa, make it clear that construction works in urban areas have many variables that make each project unique. These include: Retaining walls required Services that had to be relocated Construction circumstances and environment Accommodation of traffic requirements for the contract & time periods allowed for construction works Professional costs for project design and site supervision costs The Outa report excludes the above.
Nederland IMPACT study Basis for this study calculate actual costs to use a road in order to determine the internalisation of external costs; meaning what cost should be the cost to apply for user charging (tolling) Outa confuses the unit of measurement. It incorrectly extracts construction costs in Europe and bases its calculations on these values in millions of Euros instead of the billions stated in this study. This constitutes an almost 100 000% error. Based on Outa s own calculation, but with the correct values inserted (billions not millions), the GFIP freeways are in fact 99,7% cheaper than the comparable European costs.
Nederland IMPACT study Extract from Outa report: Extract from Netherlands report: Range of project costs between the countries mentioned above 112%
USA Kansas Study (Washington DOT) This case study states the following about construction cost estimates in urban areas: Outa did not consider these statements.
USA Kansas Study (Washington DOT) If using the lowest figure for the 13 relevant projects ($10m per lane mile) and applying the exchange rate conversions used by Outa, this case study derived cost amounts to R43 million per lane-kilometre. This is equivalent to R387m per centre line kilometre when applying the Outa logic (GFIP = 9 lanes; R43m*9). Applying these numbers in the Outa calculation, the GFIP freeways were at least 77% cheaper than the 13 relevant projects that should have been considered by Outa. The project cost in this study range 2 146% (least cost to highest cost).
Tanzania Report Particular table does not deal with new works rehabilitation and reconstruction is wrong comparison and should not have been considered Report refer to 7 m wide two lane roads
Idaho Study Could not find the study Outa states that the study (Idaho) refers to turnkey projects at new locations not adding lanes to existing freeways and rehabilitation of existing lanes as per the GFIP As stated, the tables were published to make rough estimates for planning purposes.
Capitol Fax Could not find the original document from Illinois DOT Capitol Fax not a roads authority website for political commentary Outa used an arterial upgrade example instead of a freeway upgrade example (GFIP).
Capitol Fax The two pages published explicitly state:
Rodrigo Archondo-Callao Report The type and scope of projects are not clear it only states that it refers to Africa projects No indication of road width/number of lanes For construction projects, cost range between lowest project cost and highest cost stated in the Rodrigo Report 2 044%
Rodrigo Archondo-Callao Report Conclusions reached by author:
Africon Study Projects mostly in Angola, Mozambique, Uganda, Burkina Faso Stated that certain costs are excluded Study does not list specific projects there is no road infrastructure in these countries comparable with the GFIP
AfDB Study 2010/11 Could not find this study The Outa report states, What this study highlights is that while there is no specific unit cost that can be determined, unit costs can be estimated by comparing broadly similar projects Project cost range 156%
CSIR Report This article does not deal with road construction costs and contains no research about road construction costs Deals with the need to design better durable roads This report is quoted out of context.
Trans-Kalahari Project This road is a two lane road with paved shoulders in a rural environment not related at all with the GFIP It is stated that this is a project closer to home and therefore a serious indication of out of line road construction price of GFIP This comparison used by Outa shows that the like for like principle was not applied for this and various of the other referenced studies
Outas Calculation of Over- Expenditure Outa took 11 reports, some based on research, others just presentations or statements that cannot be regarded to be research projects Some of these reports warn against comparing average costs of other projects must rather base it on the exact scope of work and country/environment Compared rural with urban freeway upgrade and expansion projects The reports that contain reference studies have project cost ranges of up to 2 146% The studies referred to by Outa show a range of 294% between the studies Based on this Outa incorrectly determines a 321% over expenditure for the GFIP
Outasown research The Outa research team s qualifications and experience is not stated The basis for quantities and rates are not provided nor substantiated Project length incorrect, no professional fees included. Calculations of their road construction expert show an over-expenditure of 152% (pg 22 of their report). But, Outa in the media reports a figure of more than double their research (321%).
Conclusions SANRAL maintains, as is shown in Outa s own research , its position that specific unit costs cannot be relied upon to use as a comparison for different types of projects within different environments.
Conclusions This report insinuates some serious allegations against SANRAL it attacks SANRAL s integrity and professional conduct. Outa makes unsubstantiated allegations of collusion, corruption, etc based on the false findings of this report The conclusions of this report only serve the objective of Outa, namely to discredit SANRAL and SANRAL s integrity.
Conclusions "Thus, the duty of determining how public resources are to be drawn upon and re-ordered lies in the heartland of Executive Government function and domain. What is more, absent any proof of unlawfulness or fraud or corruption, the power and the prerogative to formulate and implement policy on how to finance public projects reside in the exclusive domain of the National Executive subject to budgetary appropriations by Parliament" - Deputy Chief Justice Dikgang Moseneke, ConCourt, September 2012.
Thank You www.sanral.co.za
