REASONS AND MERITS OF OUTA’s CASE TO OPPOSE AND CHALLENGE E-TOLLING OF GAUTENG’S FREEWAYS
SANRAL’s proposed plans to apply an electronic tolling (e-Toll) process to Gauteng Freeways has been labeled by OUTA is irrational, unreasonable and impractical. It was most certainly not planned with the best intentions for the public in mind. This became more evident as OUTA’s members engaged rather intensively since 2010 with SANRAL, after learning about their plans to “toll” the Gauteng motorists through a most elaborate system of gantries, systems and strategies. The more we engaged, the more we realized that this plan of SANRAL’s did not attract the necessary levels of engagement and planning that a process of this magnitude required. We also learned that SANRAL had taken on something far more complex than they could handle and that it was fraught with inefficiencies, was extremely costly and they ignored far simpler methods, which exist within Government policy to collect revenue for this project.
BELOW ARE A NUMBER REASONS AND GROUNDS THAT WE, THE MEMBERS OF OUTA, OPPOSE THE TOLLING OF GFIP ROADS?
1. E-tolling of GFIP is irrational and unreasonable.
- Tolling Gauteng’s freeways is an unnecessary waste of billions of SA Tax payer’s money. We do realise the need to pay for the freeway improvements, but we expect to do so through efficient means to collect these “taxes”.
Raising funds for costly (road upgrade) projects of this nature, should be done with the least negative impact on the pockets of the public, whilst achieving the goal of funding the infrastructure. As such, if existing or new funding mechanisms are available, these should be considered and used, unless of course a valid reason is provided and is acceptable to society, i.e. the people who ultimately pay.
The installation of an elaborate and complex toll gantries, electronic tags in every vehicles&the revenue collection system for this specific project, means that users will pay not only the expense of the road construction but additionally, they must suffer the heavy and unnecessary burden of this specific toll collection system. It is estimated that the electronic tolling processes planned by SANRAL will cost R1,7billion per annum (based on the tender awarded by SANRAL to ETC for this work, at R8,4bn for the first five year period, excluding set up costs) just to operate and administer. The road construction capital costs of R18bn (i.e excluding other costs related to eTolls), if paid over 20 years with interest, amounts to approximately R1,67bn per annum (or R40,7bn over 20 years), including maintenance. E-Tolling in Gauteng was planned to raise over R95bn (i.e. 236% of the required amount) and will be a burden to the road user – an utter and unnecessary waste of the road-users money.
One must also note here that there is no intention to halt the tolling (or reduce to cover maintenance costs only) once the capital and interest is paid up. eToll charges will remain in place and will increase every year.
In the absence of SANRAL’s eToll model which they refuse to divulge or share with the public, OUTA have constructed their own, simplified spreadsheet which shows high level expenses and repayment estimates which we believe gives a fairly accurate account of the eToll costs.
Click here to see spread sheet for calculations.
2. Gauteng’s freeways are not new routes
- These are existing routes whose base structure capital costs have been paid for through taxation over time. Following years of infrastructure neglect and a growing car park, obviously the time came for Government to conduct repairs and expansion, something they ought to provided for through medium and long term planning in the past. To develop this economic zone over decades along these freeway routes and then introduce an additional tax for use thereof, is tantamount to extortion, especially in the absence of alternative public transport services and routes.
3. Poor planning & incorrect information when deciding to e-Toll:
- In the High Court papers files by SANRAL and the Department of Transport, initial estimates of the e-Tolling revenue collection process were R395 million per annum. These were the figures presented to the Minister of Transport (Min Jeff Radebe) at the time of the decision to toll. This was done with no formal calculation and in the end, the tender was awarded at R1,7bn per annum (or R8,4bn for 5 years), some 330% higher.
4. There are no viable alternative routes..
While we know there are peripheral roads alongside and close to the highways, it is ludicrous to expect any diversion of current freeway traffic onto these roads, which are already highly congested and rapidly deteriorating. This will lead to traffic chaos and gridlock during morning and evening peak travel periods.
5. There is no effective and reliable public transport option..
Earlier communications and plans for e-Tolling, by authorities, indicated that paramount to the e-Toll process was the implementation of an efficient public transport system. This alternative is almost non-existent for most of the current freeway users and to date, very little has been done to rectify the situation. SANRALs earlier eToll decision included funding allocated to Public Transport park and ride facilities, which never transpired.
6. The ‘User Pay Principle’ as argued by Government is flawed:
In order to justify their stance, SANRAL and the authorities motivate a “user pays” principle to justify their decision to introduce eTolling to the GFIP, as opposed to funding this upgrade through previously used mechanisms of the national fiscus and / or fuel levy. In their argument they pose the question, “why should the rest of the country’s road users pay (through the fuel levy or taxation) for Gauteng’s roads?” Our response to their argument as follows:
- Benefits that arise from Gauteng’s Freeways (and its upgrades) flow through to the entire country and not just Gauteng residents. Farmers get their produce to the markets and airports using Gauteng’s Freeways. Business and individual prosperity increases from improved efficiencies in transportation of people and goods through the economic heart of the South Africa. This in turn generates more taxes for the country. Equally, road improvements in other parts of the country will help Gauteng. These are South Africa’s roads, not just Gauteng’s roads.
- Gauteng contributes more than their fair share of taxation and revenue to the National Treasury. The contributions to the national treasury by Gauteng’s Road Users is approximately four times more than it receives in return from treasury. Gauteng residents do not bemoan this situation and realize that the Government needs to distribute the wealth generates from the economic hubs into other areas of need throughout the entire country. By subjecting Gauteng’s road users to this “user pays principle” on their roads, implies they are double charged for their infrastructure. Gauteng citizens have more than paid for their freeway improvement. (Click here to read more about this)
- In the e-Toll model, not all users will pay for the use of the Gauteng freeway network. Some road users such as taxis (which are not public transport) will receive “free passage”. They were granted this dispensation on the back of the assertion by SANRAL that “taxis transport the poor” and their exclusion will reduce the cost impact of tolls on the poor. We maintain this decision was introduced shortly prior to the planned initial launch date in early 2011, as the taxi industry had threatened to blockade the freeways and to boycott the system if they were forced to pay. If the taxi industry is exempt for these tolls, why not all tolls along all long distance routes? If it is to reduce the burden on the poor, what about other road users who are also poor, and make use of car pooling.
- Capping contravenes the user pays argument: In an attempt to placate the users resistance of the model, SANRAL have capped the maximum levels per category. Thus someone who uses these roads extensively and well beyond the cap, will not be paying for this “excessive” use, negating Governments ‘user pays principle’.
- Non-compliance is a serious issue in South Africa and an unfortunate blemish on our society’s image. It is estimated that less than half (some say 75%) of our regions traffic fines are not paid. We also estimate that Gauteng has around 10% incorrect or cloned number plates on vehicles using our roads. This will push the payment burden onto the compliant citizen and will also further exacerbate the problem as more will no doubt turn to fitting incorrect license plates and finding ways to circumvent having to pay for what is deemed as an unjust system. In a society where this unfortunate behaviour exists, it is best to push collection to an ‘upstream’ level (such as through the Fuel Levy and general taxation), where it is ‘untouchable’ and efficiently applied, collected and distributed. SANRAL says that cloned number plates will not be a problem if a vehicle is fitted with an e-Tag. We disagree as cloned vehicle license plate fitted to same colour and make of car that has a registered eTag account with SANRAL – will send the invoices (although flagged) to the Tagged vehicle’s account. The innocent tagged user / party will have to raise the dispute and request for refunds. The administrative burden placed on motorists to check their accounts, movements etc is another burden caused by e-tolling.
- This is an “Owner Pays” and not “User Pays” system. Part of the problem and administrative burden of this system which adds to the “unworkability” of the system, is that the vehicle owner and not necessarily the user will be picking up the bill from these gantries.
7. Lack of consultation and transparency: While SANRAL will have us believe that they did all they could to be consultative in this decision, the simple truth is they failed and fell far short of what would be expected in a matter of this magnitude. This was demonstrated by the outrage and surprise that virtually all citizens expressed when the gantries went up, and not only the individual road user, but also business and large fleet organisations were shocked by the extent and implications of the SANRAL e-Toll plans. Our legal challenge has shown that SANRAL did the bare minimum to expose and engage with society on their elaborate plan to toll the Gauteng freeway upgrade. From one advert placed in six newspapers in October 2007 to over 3,5 million licensed vehicles / motorists in Gauteng, SANRAL received only 28 responses to their request for submissions (one was a petition with 55 signatories). Despite this poor response, they were satisfied that sufficient engagement had taken place. Most regard this level of response as an absolute failure on their behalf, but alas, they don’t see it that way.
8. Alternative models of funding:
There are less expensive and far more efficient processes used for road funding. We believe the funding of our entire road network system, including upgrades to urban freeways should be conducted through the hybrid of user pays initiatives as follows:-
– The national treasury:
- There is no doubt that the entire country benefits from a good road infrastructure, even if one does not use the roads and as such, the national treasury needs to be an important contributor to the funding of roads.
– Fuel Levy: There is no doubt that the road user should also contribute toward our roads, more so than a non-road user, therefor the fuel levy was introduced in the mid 60’s. Today, the average car’s fuel tank fill contributes around R100 toward the levy, which helps maintain and build our roads. In reality, this (R45bn+ per annum) goes into the big treasury pot, but ultimately, treasury directs this toward roads.
– Long distance Toll Roads: There is an argument for the tolling of new rural and inter-city roads, which aim to bypass the longer and more dangerous older routes, justified because these routes it offers clear benefits road user, who also have the option of using the alternative route for free. Today, SANRAL earns billions from these rural tolled routes and these funds reduce the burden to subsidise other rural and urban road construction from the general road funding tax pot.
– Vehicle license fees: Revenues generated by the sale of Car Licenses at the local level are (supposed to be) utilised to fund road maintenance and infrastructure development within the local municipal and metro areas. These fees have been increased substantially in recent years, however, the benefits to the local road user are not being experienced at the levels expected from the local authorities. Nonetheless, these fees are also part of the road funding hybrid model.
THE WAY FORWARD
Understanding the logic and issues above, OUTA and its many thousands of supporters are of the strong opinion that e-tolling of GFIP is fundamentally flawed and has been introduced unlawfully. It is most certainly not in the best interests of the citizen and works against the ultimate role that Government ought to play – i.e. to enhance the wellbeing of its citizens.
OUTA and its members have embarked on a course of legal action to challenge the eToll implementation, in its current form. While Part A of our application (the urgent Interdict) to halt the launch of e-Tolling before the planned launch date of 30 April 2012) was successful, Part B of the case (The Review) from 26 to 28 November 2012 was not. In OUTA’s opinion, the judgment handed down on 13 December 2012 by Judge Vorster, was fundamentally flawed and therefore sought to appeal this outcome.
OUTA’s appeal to the Supreme Court in Bloemfontein was set aside and not entertained, due to a technicality (within administration law), for the time taken to bring the matter to court (outside 180 days of the proven period when the issue came to OUTA’s attention. The Supreme Court however expressly indicating the lawfulness of Sanral’s actions still needs to be tested and tested it will be, in such an instance when someone is summonsed for failing to pay for e-tolls (and there are tens, if not hundreds of thousands that are not paying e-tolls). In this case, the technical arguments do not apply and the Judge(s) will have to hear the detailed arguments and input pertaining to SANRAL’s behavior when seeking approval from Cabinet to introduce e-tolls. In this regard, OUTA has a wealth of information pertaining to SANRAL’s unlawful and misleading behavior, which we will bring to a qualifying court challenge on eTolls, should we raise the necessary funds from society to cover the legal costs.