In this issue
Message from the Chairman
A look at 2 years of e-Toll failure
Update on SANRAL’s New Dispensation: An outstanding rejection by society
Zuma’s brazen behaviour sparks call for broader civil action
Jacob Zuma- It’s time to step down!
Message to all our members
A time for OUTA’s transformation
Wayne Duvenage, OUTA Chairman.
A week ago, I planned to start my closing message for 2015, to OUTA’s contribution membership base, with “What a year this has been…” But the year has been usurped by one event undertaken by one man, who has impacted negatively on the lives of millions. A more apt start would now be “What a week…”.
However, let me start this communication by saying that even if Nene’s axing had not happened, OUTA had already begun the implementation of its revised strategy, with a broader mandate to tackle irrational tax policies and government’s abusive and corrupt use of taxes and levies. The past week’s events have simply entrenched our decision and increased the pace of OUTA’s transformation.
For well over a year now, OUTA has received messages from a wide audience, to look into expanding its role as a civil action movement that would tackle other matters of unacceptable public service governance. In September our management committee decided to unpack what the new OUTA should look like and by November this year, we took a decision to expand the role that we believed OUTA needed to play, within the South African civil action space.
To do so, we needed to revise our constitution and change our name to reflect our broader mandate. This has been done and with solid foundations built on the back of the e-Toll saga, our new journey has started. A revised structure with suitable talent is well underway, along with a new communication platform design, all of which is aimed at building South Africa’s most influential civil intervention organization. Our transition will ensure that we build a robust organization with depth and stamina to stay the course.
In light of this decision, we can inform you that OUTA’s new name (reserved and to become effective in January 2016) is “Organisation Undoing Tax Abuse”, which enables us to retain our strong brand acronym of ‘OUTA’.
E-Tolls remains a strong focus and we intend to intensify our challenge to see the end this debacle. The e-Toll Defense Umbrella remains in place as a process to defend our contributing members from prosecution, for unpaid e-toll bills.
Our new work has already begun. This week, we submitted a position paper to Government on their proposed implementation of a Carbon Tax. In short, the Carbon Tax as planned by Government, is another complex, costly and highly irrational tax that will fall very short of it’s intentions.
More about this in 2016.
The REDISA (tyre recycling) tax will also be challenged by OUTA, as it’s activity is out of line with its intended mandate and appears to be fraught with abusive use of the public’s funds.
And then there is the entire SANRAL finance model of Concession Toll routes and Unsolicited bidding, which requires serious scrutiny as the flow of funds doesn’t add up.
It is obvious that in our current economic and political turmoil, we can’t be everywhere or try to tackle all that is wrong. But we will collaborate with other effective civil action movements as we select those issues that will have highest impact for change.
Times like these tend to elicit knee-jerk reactions and heightened anger, which generally subsides over a few weeks / months, where after society returns to the grindstone, a lot poorer but more disgruntled. At OUTA, we believe the situation can and must be challenged, and as we did by staying the course on the e-toll saga, we intend to do the same on the matters that we take on. The strategies and tactics we intend to employ will be multi-faceted and meaningful.
To all of you who have supported OUTA in the past, I thank you for giving us the legs we need to do our work. But as you can imagine, this hill is fast becoming a mountain and we need more resources for the fight ahead. We rely purely on public and business funding. We are also encouraged by the growing support from business and envisage a bigger uptake from this sector of society as we move into the challenges that face us in 2016. Please share this message of much needed support with all you know.
Be safe over the summer holidays and we’ll see you on the other side, with more action and activity to hold our public servants accountable to the public.
A look at two years of E-Toll Failure
This week, two years ago, on the third of December 2013, the E-Toll scheme was launched, despite overwhelming public dissention and warnings that it would not be an effective ‘user-pays’ mechanism to service the Gauteng freeway upgrade bonds.
OUTA’s research and position paper on the e-tolls scheme (Beyond the Impasse), provided an indication of what would might transpire if the system was forced into place and why it was doomed from the outset. Virtually all of OUTA’s predictions of a largely unworkable scheme, packed with errors and low collection rates, have transpired.
OUTA’s research – which studied international examples of failed and successful electronic tolling schemes – identified eight critical factors required for e-toll systems to succeed. Sanral failed on all counts and five of these elements were:-
- A high degree of public support with strong advocates of acceptance:
This was not the case with Gauteng’s e-tolls, which peaked at R120 million per month by June 2014, less than half their original target of R260m. By mid-2015, less than 10% of road users were generating around 23% of Sanral’s required e-toll revenue levels.
- Weak oppositional forces to the scheme:
On the contrary for Sanral, the public’s outrage has been supported by virtually all political parties (barring one), labour movements, civil action groups and most business associations, all of which have overwhelmingly opposed the e-toll scheme.
- Alternative public transport systems need to be adequate and reliable:
In Gauteng’s case, aside from Gautrain (which only caters for 6% of the regular commuter traffic, between Pretoria and Johannesburg), public transport alternatives have fallen dismally short of catering for the vehicle bound commuters in the province.
- The pricing and billing systems need to be simple and user friendly: Sanral’s e-toll scheme was troubled with complicated tariff and payment structures from the outset, which left most users confused. Even the 46,000 Gauteng taxis that were exempt from paying e-tolls, were never fitted with e-tags or properly registered with the scheme, giving rise to more doubt about the scheme’s workability.
- The technology and data needs to be extremely reliable and trusted:
With the scheme’s reliance on e-Natis and thousands of billing errors, e-tolls were generally not regarded as trustworthy. This was compounded by a court dismissal of the system’s information which was found to be inaccurate.
These factors coupled with an ongoing lack of transparency by Sanral, culminated in the public’s resistance and a R6 billion shortfall in collections (at discounted tariffs), in the first two years of operation. Investor confidence also waned as Sanral struggled to sustain interest at their bond auctions.
Of the roughly R8 billion invoiced over the past two years at discounted tariffs, only R1,8 billion (or 23%) was collected and virtually all of this has been spent on the collection process managed by Kapsch TrafficCom’s ETC (Electronic Tolling Collection company) and its supplier companies. Virtually nothing has been directed toward servicing the road construction debt.
A host of other incidents dealt additional blows to the system’s integrity, further alienating the public and businesses from the scheme, causing many to cancel their e-toll contracts. Some of these blows were:-
- The Competition Commission issued certificates to SANRAL to pursue inflated road construction prices from collusive construction companies. Their lack of enthusiasm to share detailed plans with the public in this regard has been nothing short of disappointing.
- OUTA’s research and opinion expressed that SANRAL had grossly overpaid for the Gauteng freeway upgrade, by as much as 67%.
- Several of SANRAL’s adverts were ruled to be misleading by the Advertising Standards Authority throughout 2014 and 2015.
- Ongoing exposure of SANRAL’s exaggerated e-tag sales claims, which highlighted their misleading impression of the scheme’s success.
- The Randburg Magistrate Court’s dismissal of inaccurate gantry information provided during the Duduzane Zuma accident case in November 2014.
- The Minister of Transport’s announcement in Parliament in July 2014, that prosecution against e-toll defaulters was not an option the Government could realistically pursue to enforce compliance under the current circumstances.
- The Western Cape’s successful court challenge to halt SANRAL’s irrational concessionaire plan to toll the Cape Town freeway upgrade.
- The Freedom Front’s exposure of the e-Toll scheme’s failure to have its systems verified by the National Regulator for Compulsory Specifications (NRCS) in terms of the Metrology Act, and pending the ruling by the Consumer Commission.
- “One would imagine that given this backdrop, the authorities would have come to their senses and halted this expensive irrational scheme, further sparing the taxpayer millions of rands on a wasteful e-toll marketing campaign,” says Wayne Duvenage, OUTA’s Chairman. “Instead, Sanral have tirelessly launched failed campaign after campaign, with their latest 60% discount being a desperate ‘last roll of the dice’, to claw back some of the six billion rands in unpaid e-toll bills.”
Over the past year, the e-toll scheme’s collection process has literally being kept on ‘life support’ by government vehicles and a handful of large logistic and fleet based organisations, who are fed up with the scheme but do not have an appetite to rock government’s boat.
OUTA anticipates that SANRAL will shortly unleash another costly propaganda drive, in an attempt to paint another false impression of the public’s uptake of their latest dispensation.
Update on SANRAL’s New Dipensation: An outstanding rejection by society
After 1 month of the new dipensation, SANRAL were able to collect less than 1% of the outstanding amount.
The dispensation offer, supported by another multi-million rand marketing campaign and kicked into play on the 2 November, and has clearly been a disaster, as it has only managed to raise a dismal R40 million, which is less than 1%, of the outstanding debt. November was the first and most critical month of the dispensation, during which time SANRAL needed to see a significant uptake of their discounted offer, to convince their bosses that the scheme might be sustainable.
OUTA had calculated that a claw-back of less than R500 million collected per month on average for the six month period, would still put the scheme at risk, as even at this level of uptake, the scheme would still have less than 50% compliance. To learn that SANRAL have only reclaimed R40 million in the first month of the dispensation offer, is an indication that the scheme is now dead and buried.
In our opinion, there is no way the e-toll scheme can recover from this reaction to their latest dispensation.The public have spoken and accordingly they have sent a strong message to the government that they will not be coerced, intimidated or fooled into paying these irrational e-toll taxes.
The time has arrived for the Minister of Transport to now step in and call off this charade. Sanral is wasting millions of taxpayers money every month on an advertising campaign that is being ignored by the public. OUTA will not let up and will continue to fight this issue until the e-toll contracts have been cancelled and the outstanding debt from the collusive construction companies has been recovered to reduce the debt to society.
Zuma’s brazen behaviour sparks call for broader civil action
OUTA denounces president Zuma’s policy-driven removal of the astute Minister of Finance, Nhlanhla Nene, which will come at the expense of the prosperity of South Africa’s people
OUTA denounces president Zuma’s politically-driven removal of the astute Minister of Finance, Nhlanhla Nene, which will come at the expense of the prosperity of South Africa’s people.
We cannot fail to notice the similarities between Minister Nene’s removal and the “redeployment” of the Minister of Transport, S’bu Ndebele, and his deputy Minister Jeremy Cronin in June 2012.
Throughout 2011 and 2012, Minister’s Ndebele and Cronin questioned the urban tolling matter and both were doubtful of SANRAL’s research and rationality of the e-toll scheme. Following OUTA’s successful interdict of the e-toll launch in April 2012, the CEO of SANRAL, Mr Nazir Alli resigned. His departure however was brief and shortly after his reinstatement at the end of May 2012, Minister Ndebele and Deputy Transport Minister Jeremy Cronin were inexplicably redeployed by President Zuma.
In OUTA’s opinion, this week’s redeployment of Minister Nene is yet another slap in the public’s face by Zuma, who has ousted another obstacle to his government’s runaway spending, growing debt and questionable decisions. Nhlanhla Nene’s rationale and probing approach is what tax-payers expect of their Finance Minister. Clearly Jacob Zuma disagrees and the consequences of his brazen decision to remove Nene will now have a dire impact on the South African economy and its people.
The winds of discontent among South African public and more specifically, the tax-paying citizens, are strong enough to fan a fiery backlash that the ruling party will struggle to contain. We have seen this with the irrational e-toll scheme, which gave rise to an extremely effective revolt by 91% of the Gauteng freeway users who have given the e-toll scheme the finger. Today, the only people keeping e-tolls alive are a handful of corporate and logistic organisations, and many of these are de-tagging and contacting OUTA to seek advice and protection within the e-Toll Defense Umbrella.
The level of effective civil resistance against e-tolls has been staggering, and recently we have received numerous calls for OUTA to spearhead a similar public resistance campaign into other areas of irrational governance. We are obviously taking note of the situation and cautiously assessing all options under the circumstances.
A tax revolt is a worrying situation for any nation to find itself in, however, a careful and collaborative approach with organized business and civil society does have the potential to elicit impactful change.
South Africa’s credit situation is already dreadfully close to junk, and this decision by Jacob Zuma could very well be the shove that sends us over the brink. Unlike Greece, our country enters the possibility of an economic meltdown, not because of the actions of the South African people, nor because of any irresponsible conduct by our financial institutions, but because of a relentless political abuse of power and the systemic plundering and squandering of taxpayer money.
This country and it’s people can no longer afford to tolerate a situation where blatant abuse of power and politically-connected enrichment continues without consequence. It is for this reason that civil society organisations such as OUTA and others have the potential to hold our governing authorities to account. Our effectiveness however, is directly proportionate to the public’s participation and financial support to ensure we have the talent, facilities, and litigation provisions to conduct the work required. This is growing daily thanks to OUTA’s increasing membership base.
Certain spheres and issues can only be influenced by collective action and without the power of an effective civil society, all that remains is politics, and politics has failed us today.
Jacob Zuma – It’s Time to Step Down!
OUTA’s message to Members of Parliament
As part of the coalition Unite Against Corruption, OUTA’s John Clarke spoke at the protest march on the Day of Reconciliation, on Wednesday 16th December. His shortened speech highlighted the following points.
On behalf of the members of OUTA – soon to be known as ‘Organisation Undoing Tax Abuse’ – we fully endorse this protest.
In the fight against e-tolls, President Jacob Zuma drove another wedge between the state and its people. In August 2013, President Zuma signed the Transport Matters Amendment Bill and four months later, the e-toll gantries went live. His actions unleashed another irrational and grossly inefficent tax on the Gauteng motorists, one which never achieved a compliance level 30%, and which has now declined to less than 10%.
In February 2014 President Zuma did it again, refusing to acknowledge the Public Protector’s report on Nkandla, or to pay back any of the money. “I did not ask for them [the security upgrades] so why should I pay for them.” Our retort was “we did not ask for etolling so why should we pay for them?” Quite apart from our gripes against Sanral, boycotting e-tolls became a proxy for thousands to protest against President Zuma’s lack of accountability and transparency.
As was expected in May 2014 (denied at first by Mantashe), Gauteng ANC suffered its biggest fall ever in the polls. The new ‘anti-etoll’ Premier David Makhura tried vainly to claw back, but as things now stand e-toll compliance is going backward.
The ANC spokesperson tells us that the President does listen to the people. If that is so, why do we still have e-tolls in Gauteng?
President Zuma has outlived his usefulness. His unbridled decision making has become dangerous to our country and simply put – he must go. Power is necessary, but power wielded without legitimacy, honesty and transparency is always going to become a corrupting power. The values that guide President Zuma’s exercise of power are not the values of our nation’s constitution.
After the sacking of Minister Nene, the ANC’s NEC missed a valuable opportunity to recall him. Instead, having fallen off his high horse, the NEC has helped President Zuma to get back into the saddle and are singing his praises. They have betrayed their true colours. They too must go.
OUTA’s broader mandate will be to confront the authorities on moral grounds, on political grounds and on legal grounds, as part of an ever more vibrant, empowered and confident civil society who know their rights and are prepared to exercise them.
As we cross this magnificent bridge named in honour of a truly good leader – Nelson Mandela – let us all resolve to take each step with reverence and consciousness that, just as President Zuma has crossed a threshold by firing a good and honest finance minister, our time has come to cross a bridge that symbolises another walk to freedom, by holding him accountable, even if his power caucus is too cowardly to do so themselves.
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