Demand for an investigation into real beneficiaries of toll contracts

THE Congress of South African Trade Unions (Cosatu) yesterday demanded an investigation into possible connections between companies involved in SA’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.

Internet sites 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 joint venture, which won the R1,1bn project from the South African Road Agency Ltd (Sanral) in 2009, along with local firm Traffic Management Technologies (TMT).

The 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 Electronic Toll Collection consortium, but it appears the Swedish unit owns the lion’s share.

Swedish Kapsch TrafficCom holds 40% of Electronic Toll Collection 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 SA in the arms deal, sold a subsidiary called Combitech Traffic Systems to Kapsch. That firm 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.

According to Democratic Alliance Gauteng MP Jack Bloom, little is known about the shareholders of TMT and their role in the Gauteng highway contract.

Mr Bloom and Cosatu spokesman Patrick Craven said the links between the Electronic Toll Collection consortium and arms deal companies needed to be investigated urgently.

Paul Hoffman, head of the Institute for Accountability in Southern Africa, last week called on Public Protector Thuli Madonsela to investigate how a foreign company involved in alleged corruption during the 1999 arms deal could be the biggest winner when e-tolls come into effect.

Ms Madonsela’s office was yesterday unable to confirm whether the request had been received.

Mr Hoffman was responding to a report in an Australian newspaper which made the link between the arms deal saga and Kapsch Sweden.

Mr Hoffman yesterday said: "If this is true, the deal can be cancelled because it’s tainted by fraud and corruption. If it’s true, someone must take the pain, if not, then the falsity must be exposed."

Attempts yesterday to contact the Department of Transport and Sanral were not successful.