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Legal downfall for e-tolling?

Read time 4min 30sec

Gauteng motorists have a chance to engage the controversial e-tolling project on a legal front, since it could be seen as violating the Consumer Protection Act (CPA).

Rob Handfield-Jones, MD of driving.co.za, made a submission to the e-tolling steering committee that is currently running consultations to negotiate the toll tariff structure, which was initially met with outrage by the public.

He suggested the entire Gauteng Freeway Improvement Project (GFIP) could face legal challenges that would see it tied up for three to five years.

E-tolling is an open road, multi-lane toll infrastructure that allows for tolls to be charged without drivers having to stop. There are no physical booths.

Facts first

Handfield-Jones says the very existence of the steering committee shows the acceptance by transport minister Sibusiso Ndebele that the consultation process for the GFIP project was inadequate.

“I feel that regardless of the outcome of the steering committee's work, a strong case in law will still exist to have the entire project's approval set aside on this basis.”

He adds that the minister is required to have access to all information related to “material facts”.

Nicholas Hall, a lawyer at Michalsons Attorneys, says if the minister did not have all the proper facts and research, this could be seen as going against administrative law.

North Gauteng High Court judge Bert Bam passed a judgement last month that stopped South African National Roads Agency (Sanral) from constructing a toll gantry on a section of freeway near Centurion.

Bam made the judgement based on Sanral's failure to comply with the National Environmental Management Act; its lack of consultation with affected parties; and Ndebele's lack of sufficient information to make an informed decision due to the omission of material facts.

Invalid declaration

Handfield-Jones suggests Sanral's failure to perform adequate research into the consumer impact of the entire GFIP project leads to the same conclusion as that reached by Bam.

“It is my belief that the minister was not in possession of material facts needed to declare the GFIP roads as toll roads and that his declaration of these roads as toll roads was invalid... there is, in my belief, a very real possibility of the entire GFIP project being overturned in a legal challenge.

“This would be extremely damaging to SA's international reputation and would lead to the government having to repay the investors directly.”

He referred the committee to section 5.2 (c) of the CPA, Act 68 of 2008, which reads: “This Act does not apply to any transaction if the transaction falls within an exemption granted by the minister in terms of subsections (3) and (4).”

He saidno such exemption was granted to Sanral. “I am, therefore, of the view that Sanral is subject to the terms and conditions of the CPA and that motorists who pay tolls on the GFIP roads meet the description of 'consumers' as the term is defined in the CPA.”

Unreasonable tariffs

Handfield-Jones also drew attention to Section 3 (1), of the CPA, which says the Act protects consumers from unfair and unreasonable trade practices.

“I believe that... the unreasonably high levels of the toll fees bring Sanral into conflict with the clauses of the CPA and that grounds will exist for legal challenges once the CPA takes effect on 1 April 2011.”

Partner at Hahn and Hahn Attorneys Janusz Luterek notes that Section 48 of the CPA says prices must be fair, just and reasonable, so there are grounds for a legal challenge; however, this is a very difficult argument, because it's relative.

“What are unfair, unjust and unreasonable prices? It's very hard to determine. If you have R5 and bread costs R7 then it would be unjust for you. But if it's R5 and you've got R7 then it's just.

“Personally, I will be very surprised if it even gets heard. It doesn't mean it's impossible, but I won't give it good odds. It's grasping at straws, but it's not impossible.”

He adds that any consumer could lay the complaint, or anybody could do so on behalf of the consumer.

Unavoidable tax

Handfield-Jones also says tolling is an opportunity for the state to use Sanral as a de factotax collection agency, while it uses the taxation money previously allocated for roads infrastructure for other purposes.

“Tolling is an attempt to increase taxation revenue, without needing to increase the number of taxpayers... this stratagem will probably be regarded as illegal under the CPA, as, among other injustices, it is a form of duplicate taxation.”

Trade union Solidarity also said the toll system, together with the current fuel taxes, comes down to double tax.

However, Luterek says this is not a viable argument. “The CPA doesn't deal with tax so the taxation part is a dead duck. Multiple tax happens everyday in everything you do. It's not an argument that you could reasonably have.”

E-tolling unnecessary?

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