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Bite the bullet: e-tolls are here

Sanral is confident the system will be a success.

Read time 14min 10sec

Gauteng's highways are going to be tolled! Government's controversial open road tolling system is going live any day now and seemingly no amount of legal challenge, civil uproar or public protest will stop it.

President Jacob Zuma's signature - which was added to the crucial Transport and Related Matters Amendment Bill just last month - has solidified what had been, up until now, a somewhat blurred reality. Legal challenges against the project have also been dropped and so, for all intents and purposes, there is nothing standing in the way of the highway tax that has had Gauteng up in arms, being instituted.

If it does go ahead before the end of the year, as transport minister Dipuo Peters has indicated, 2013 will be remembered for little else. But why has government's system - which basically boils down to the road-using public chipping in to help pay for the multibillion-rand Gauteng Freeway Improvement Project (GFIP) - incited so much bitterness?

The Opposition to Urban Tolling Alliance (Outa) - formed last year March to provide a platform for action against government's open road tolling plans and to act as a mouthpiece for those who felt hard done by because of it - reflects much of the sentiment behind the acrimony.

Why is e-tolling so unpopular?

Outa chairperson Wayne Duvenage says the Department of Transport (DOT) and the SA National Roads Agency's (Sanral's) plan to apply an electronic tolling process to Gauteng's freeways is not only irrational, unreasonable and impractical - but also illegal.

"It was most certainly not planned with the best intentions for the public in mind."

E-tolling was envisaged by government as far back as 1998. The GFIP - a R20 billion project that will see the upgrading of major arteries across the province - was launched in 2007. Only by 2010, however, did the greater public really become aware that something was going on, as Sanral started building what would in the end be 49 electronic toll gantries across the highways of Johannesburg and Pretoria. Many at first wrote these off as improvements ahead of the influx of foreigners expected for the FIFA World Cup tournament.

This is the first bone of contention. Outa strongly believes the public was hoodwinked by the powers that be from the get go. Sanral maintains it followed due process and that the public was adequately informed and included.

E-toll timeline

The following timeline depicts some of the many issues the e-toll system has faced since government first conceived the system to fund the GFIP. The timeline does not take into account several threats of other legal challenges that never materialised, nor the barrage of passive and active protests that have escalated, in particular, in the last year:

September 2009: Construction of the gantries across Gauteng's highways begins.
February 2011: First set of e-toll tariffs are issued.
February 2011: Transport minister Sibusiso Ndebele puts e-tolls on hold.
August 2011: Cabinet approves new e-toll tariffs.
October 2011: Ndebele puts e-toll plans on hold while consultation takes place. E-tolls are tagged to begin in February.
November 2011: Sanral opens e-toll registrations.
January 2012: Sanral says e-tolling will not commence in February.
February 2012: Finance minister Pravin Gordhan announces e-tolling will begin in April.
March 2012: Global credit rating agency Moody's Investors Service downgrades Sanral amid e-toll uncertainty.
March 2012: Outa is created to provide a platform for opposition to government's open road tolling plans. The alliance lodges an application with the North Gauteng High Court to prohibit e-tolling.
March 2012: Sanral opposes Outa's interdict.
April 2012: Judge Bill Prinsloo grants Outa's interdict, putting e-tolls on ice pending a full judicial review of the system.
May 2012: National Treasury files an application to appeal the interdict in the Constitutional Court.
September 2012: The Constitutional Court sets aside Outa's previously granted interdict, allowing Sanral to commence with e-tolling.
October 2012: New tariffs are gazetted and government announces e-tolls will commence in December - just before Christmas - saying it is no longer about debate, but details.
November 2012: The ANC withdraws legislation pivotal to the commencement of e-tolls, the Transport Laws and Related Matters Amendment Bill (E-toll Bill) - putting the system on hold once again. E-tolling is tagged to begin in February.
December 2012: Judge Louis Vorster rules against Outa's High Court application, deeming e-tolling legal - and awards costs to Outa.
January 2013: Outa submits an application for leave to appeal Vorster's ruling, claiming the judgement misinterpreted the Constitutional Court's earlier ruling.
January 2013: The North Gauteng High Court grants Outa leave to appeal the December ruling in the Supreme Court of Appeal in Bloemfontein later in the year.
March 2013: The National Assembly passes the E-toll Bill, bringing the system a step closer to implementation. Subsequent steps include the Bill passing through Parliament's National Council of Provinces (NCOP), back to the National Assembly and then to president Jacob Zuma's desk for signing.
April 2013: The E-toll Bill makes its way to the NCOP and Sanral soon thereafter launches a multi-channel advertising campaign urging motorists to gear up for the system's imminent implementation.
May 2013: A question mark hangs over the numbers Sanral gives regarding individual motorists and key accounts that have purchased e-tags - a figure vacillating between 500 000 and 600 000.
May 2013: Another speed bump for e-tolling as discussions on the E-toll Bill by the NCOP are delayed.
May 2013: Sanral publishes draft regulations and notices as government gets ready to implement e-tolling on Gauteng's roads.
June 2013: Outa appeals to the public for the R1 million it needs to cover the legal costs for its e-toll appeal. The DA steps up and pays the bill.
June 2013: Motorists are up in arms following a press conference abroad during which Kapsch TrafficCom - the Vienna-based company commissioned to develop and maintain the e-toll system - announces it will receive a princely annual revenue injection of EUR50 million from SA's e-tolls.
August 2013: It emerges Sanral urgently needs R1.5 billion to pay off bonds within the following three months.
September 2013: Zuma signs the crucial E-toll Bill.
September 2013: Outa's case is heard and dismissed, four days after the Bill is signed and the wheels are truly set in motion.
October 2013: Motorists are encouraged to get tagged as transport minister Dipuo Peters is adamant the system will go live before the end of the year.
October 2013: Outa leaves the judicial arena, deciding not to pursue its case with the Constitutional Court but rather to fight the fight with the people on the ground, offering support for motorists. Sanral welcomes the decision, saying sanity has prevailed and ups its "get tagged" campaign.

Duvenage, however, says: "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."

He says Sanral's public participation attempts were paltry. "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 more than 3.5 million licensed motorists in Gauteng, Sanral received only 28 responses to their request for submissions."

Other issues the alliance has consistently waved in front of the courts' podiums include the notion that there are other ways to fund the project - for example, a fuel levy. Also, the organisation notes that Gauteng's freeways are not new routes, but rather existing routes that have been funded through taxation over time.

In High Court papers filed by Sanral and the DOT, the initial estimate for the collection of e-toll levies was R395 million per year. Duvenage notes that this is the figure presented by then transport minister Jeff Radebe (2004 to 2009) - "with no formal calculation". In the end, the tender was awarded at R1.7 billion per year - some 330% higher than originally envisaged.

While Sanral mouthpiece Vusi Mona recently reiterated that motorists who do not want to fork out for e-tolls have "plenty of alternative routes" available to them, Duvenage says it is "ludicrous" to expect diversion of current freeway traffic onto these roads, which he says are already highly congested and rapidly deteriorating.

Public transport, naturally, would be a solution for obstinate anti-toll road-users - but Outa says this is not an option, as government has as yet failed to provide sufficient public transport options. "Sanral's earlier e-toll decision included funding allocated to public transport park-and-ride facilities, which never transpired."

Government has long touted the user-pay principle as the way to go, but Outa says its argument is flawed. In justifying its pay-as-you-use stance, Sanral and the DOT say e-tolling as a means of funding the extensive GFIP project - as opposed to using the national fiscus or fuel levy - is only fair. Sanral has repeatedly begged the question: "Why should the rest of SA pay for one province's roads?"

And Outa has answered this on behalf of Gauteng motorists, saying the benefits arising from upgrades to the province - SA's financial hub - flow through the entire country. "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 SA. This, in turn, generates more taxes for the country."

Another point in question is the notion that much of the money generated by e-tolling will be sent out of the country. Sanral awarded the contract for e-tolling implementation to Electronic Toll Collection (ETC), which is 56.81% owned by Kapsch TrafficCom and 35% held by SA-based Traffic Management Technologies (TMT). It tendered R6.22 billion for design and construction of the toll system.

The shareholders of joint venture ETC are KapschTrafficom AB (a company incorporated in Sweden), KapschTrafficom AG (a company incorporated in Austria) and TMT Services and Suppliers Proprietary Limited (a company incorporated in SA).

In June, Kapsch announced its former loss-making days may be over, thanks to e-tolling in SA. At the time, Outa said e-tolling was essentially privatising the country's social infrastructure to offshore companies.

Sanral quickly responded, saying the figure Kapsch cited it would get in from SA's e-tolls (EUR50 million, or about R675 million per year) included operational costs and the purchasing of the system hardware and software, which Sanral says will become its own asset.

On the other hand, the roads agency conceded that Kapsch's posting of three consecutive quarterly losses in the year to March "were partly caused by the delays in SA".

Mona said: "What must also be made clear is that all tolls collected from the GFIP go to Sanral. ETC is paid for services rendered on a monthly basis, and the payment is strictly according to a bill of quantities, as specified in the tender contract. Therefore, only dividends they declare may be paid to foreign companies, after income tax is paid in SA."

Dodging deadlines

Adding insult to injury for persona non-grata Sanral, are the agency's six missed deadlines since April 2012.

Outa then interdicted the introduction of e-tolls following government's assertion that the system would officially take off that same month. This did not happen and the goalpost was shifted to March.

Last year ended on a sour note, with Sanral indicating e-tolls were set to begin around Christmas time. But the tables turned about a month later, when the ANC withdrew the E-toll Bill just before its second reading debate in Parliament.

At the time, indications were that Sanral's launch plans had only been foiled until February of this year, but the month rolled by, and uncertainty remained.

Meanwhile, Outa was granted leave to appeal e-tolls - a hearing that took place on 25 and 26 September in the Supreme Court of Appeal in Bloemfontein and saw Outa's argument being rebuffed. Throughout the debate and legal processes, the DOT maintained that the appeal was irrelevant to the legality of e-tolling and said implementation was imminent.

Alex van Niekerk, project manager of the GFIP, said at the time that e-tolling was ready to go ahead at any given moment - echoing Sanral's repeated contention.

"We have been running the system in a live environment for months now. Administration processes are in place to handle payments, and the violation system that sends invoices and notices to violators is automated."

By the end of July this year, another deadline for commencement had come and gone and Sanral finally stopped putting a date to e-toll implementation, saying the system would go ahead when Zuma was good and ready.

Defending the system

Up against a seemingly relentless barrage of criticism and scrutiny from Outa and the disapproving public, parties instrumental in implementing and maintaining the e-toll system - chiefly Sanral and the DOT - have continuously justified government's e-toll rationale.

The entities have plugged the user-pay principle as the most fair and practical means of funding the multibillion-rand GFIP. Sanral defines tolling as "an equitable method for a motorist to pay only for the section of road used, referred to as the 'user-pay' principle".

The roads agency says its approach is "one of the most advanced systems in the world, which enables the individual design of each road section based on the needs for that particular section of the road".

Mona dubbed the technology implemented by Sanral through the e-toll system as world class. "It has enabled us to introduce open road tolling in SA, [making] it possible for users to drive through a gantry at highway speeds without having to slow down to pay the toll."

Ultimately, the importance of tolling, says Sanral, lies in the fact that it enables the body to provide roads sooner than the traditional tax-based revenues that would traditionally fund roads and that the system ensures dedicated funding for maintenance of the road.

On the benefits e-tolling will bestow, Sanral says - in addition to contributing to improved road safety - toll roads generally reduce travelling distances and result in substantial savings on the running costs of vehicles and travel time.

"The user-pay principle represents a fair and precise way of paying for transportation facilities. Tolls link the benefits for the road user with its fees by charging users only in direct relationship to how much of the road they use."

Sanral CEO Nazir Alli recently said it was unfortunate that commentators could not see the benefits of open road tolling in Gauteng. He said - if one looks at the loss of production, vehicle wear and tear, and operation costs and pollution - the price of paying e-toll tariffs paled in comparison to the good the system will do.

Sanral has also repeatedly downplayed the financial burden e-tolling will effect for highway users and says the toll it will take on the poor is minimal. Earlier this year, Sanral kicked off a marketing campaign touting e-tolls on Gauteng's roads as pleasantly inexpensive.

Around April, the agency published an advertisement in various publications positioning the financial implications of e-tolls on motorists as "better than expected".

While statistics - garnered from the live system during last year - were presented at a media briefing in November, Sanral really stepped up its e-tag marketing campaign in January. The campaign also continues to push the value and ease of registering for an e-tag, which will qualify road users for a minimum discount of 48%.

Sanral did the bare minimum to expose and engage with society on their elaborate plan to toll the Gauteng freeway upgrade.

Wayne Duvenage, Outa

The agency has used various advertising mediums, including print, radio, digital and television. In one of its print adverts, Sanral said it used its licence plate recognition technology to track actual usage by 2.5 million vehicles on the Gauteng e-roads and garnered these statistics: 78.5% of road users will pay under R100 per month, 12.8% will pay between R100 and R200, 5% from R200 to R300, and only 3.7% will end up paying R300 and up to the current set monthly cap of R550 per month. "...what we found was even better than we had hoped," stated the advertisement.

Alli has also added the fact that the system will create jobs and stimulate the development of small, medium-sized and micro enterprises to the list of e-toll advantages.

And, despite the apparent road-user rage when it comes to e-tolling, Mona says the South African public will come around and "[Sanral] and the public will sort this matter out".

Above all, Sanral says, is the fact that SA's judiciary has deemed the system legal and determined that the powers that be carried out sufficient public participation processes on the matter.

In October, following the Supreme Court of Appeal's rejection of Outa's last-ditch attempt to intercept e-tolling, Mona said sanity had prevailed. "We trust people will respect the integrity of the judiciary and value its independence.

"Three courts - Constitutional Court, Gauteng High Court and the Supreme Court of Appeal - have ruled on this matter confirming Sanral's view that infrastructure upgrades on the GFIP complied with all the legal processes, including extensive consultation since Cabinet approved the project in 2007."

Mona said it was time to move on and work together.

House of cards?

Whether Gauteng motorists are ready to move on and unite to make e-tolling work is, however, highly debatable.

Social media and online forums reflect a general attitude of defiance, with some commentary going so far as to suggest anarchy and vandalism. The level of compliance Sanral will need from Gauteng's 3.5 million-odd road users - if the system is to emerge sustainable - has been tagged by interested parties as unattainable. Duvenage reckons about 90% of the province's road-using taxpayers are against the system.

Administration processes are in place to handle payments and the violation system that sends invoices and notices to violators is automated.

Alex van Niekerk, GFIP

On top of that, says Outa, non-compliance is a serious issue in SA and "an unfortunate blemish on our society's image". Duvenage points out it is estimated that more than half (some say 75%) of the region's traffic fines are not paid.

Duvenage maintains the e-tolling system is a house of cards that is doomed to collapse, as the vast majority of people are dead set against it and will not participate.

It may be telling too, that a number of e-toll systems around the world - where compliance levels are considerably higher - have been fraught with defiant road users, leading to financial ruin and, in some cases, their ultimate demise.

But Sanral is confident the system it dubs world class - along with the agency's plans to nab e-toll offenders - will not let government down. The agency's enforcement plans include using SA's Criminal Procedures Act and dedicated e-toll courts to get stubborn motorists to pay the new tax. In addition to this, says Mona, a mobile force will roam Gauteng's e-roads for enforcement of outstanding infringements. These measures in themselves have been harshly criticised for being "scare tactic attempts".

Now that e-tolling is a case of when - and not if - the only question awaiting an answer is: will Gautengers swallow their ire and stand together at the end of the day to support what has long been perceived as an ill-conceived project on the part of government - or will the system come crashing down, as many predict?

The proof will be in the eating of the proverbial pudding and all that is left to do is wait and see, says Outa.

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