The Organisation Undoing Tax Abuse (OUTA) calls for transparency on construction and rolling stock costs, funding and project management, should proposals to expand the Gautrain go ahead.
This follows reports that the Gautrain Management Agency (GMA) hopes to add another 150km of track and 19 stations to the network.
“History shows us that our construction industry has manipulated pricing and that Government has often failed in its oversight of these massive social infrastructure projects. Civil society would like to see an extremely transparent tender process to ensure that society gets the construction and rolling stock at the best prices possible,” says Wayne Duvenage, OUTA CEO.
“OUTA welcomes the development of an expanded public transport system and the plans to integrate the Gautrain with Metrorail as well as the linking of east-west routes and the inclusion of poorer and more distant suburbs such as Jabulani.”
OUTA believes the funds for such social infrastructure expansion in South Africa’s economic hub should come from National Treasury allocations, to which Gauteng already provides the largest input. We caution against the GMA’s proposal that vehicle licence fees, airport taxes and VAT should be used to fund the Gautrain expansion. Vehicle licences have already been pushed to the limit and increases to these taxes will have unintended negative consequences. Furthermore an increase in VAT for the Gautrain would not be a wise idea.
Treasury should improve efficiencies in public sector spending and tax collections and allocate some of Gauteng’s receipts back to the province to improve its integrated public transport system. An element of provincial allocations to this project along with private sector funding is welcome; however, all private sector tenders and contracts must be transparent and comparable to international standards.
“Without transparency and clarity of costs and tenders, along with benchmarks to international best practice, we could very well find ourselves with an expensive and overpriced system that we cannot afford to repay. This is precisely what happened with the Gauteng freeway project and the e-toll tenders which were excessive and made the scheme unaffordable. What pleases us is that a mix of National Treasury, provincial budgets and private sector funding options are being considered for the Gautrain social infrastructure expansion project. However, there needs to be sufficient consultation and the inclusion of civil society,” says Duvenage.
“If the economy grows the tax base grows and allocations from taxes should be used to assist with most of the social infrastructure funding, including urban freeways and urban public transport systems. These in turn add to the productivity of our cities and give rise to additional tax collections by the Government.”