OUTA’s submission to Government on e-toll tariffs and Exemption Notices

Please get your submissions off to MphahleT@dot.gov.za by the 25th November 2012

Attention: Mr T. H. M. Mphahlele

The Department of Transport

Private Bag X193 Pretoria 0001

BY E-MAIL: MphahleT@dot.gov.za

Dear Mr T Mphahelele

OUTA’s SUBMISSION ON E-TOLL TARIFFS – GAZETTE # 35756 & 35755

Notwithstanding our numerous submissions to the Inter Ministerial Committee (IMC) and our legal challenge against e-tolling of the Gauteng Freeway Improvement Project (GFIP), we hereby submit our input and concerns w.r.t. the toll tariffs and exemptions as follows:

The e-toll tariffs as provided in the gazette are too high, to the value of 100% and we believe all should be exempt from paying tolls on Gauteng’s urban freeway system, for the following reasons:

1. IRRATIONALITY OF TOLL COLLECTION COSTS: It is irrational to subject the country’s citizens and visitors to an unnecessary cost of toll collection when, within Government’s and SANRAL’s own policies, there exist more efficient mechanisms to collect revenues from road users and tax payers to pay for the infrastructure upgrade, is irrational.

2. UNREASONABLY HIGH COST OF COLLECTION: A major source of concern is the full costs of the e-tolls ETC process, which have consistently varied in the various affidavits and other tables presented by the authorities over the past year, without any granularity on the model’s basic assumptions. When adding up ALL the costs related to tolling, these will come in between 24% and 40% of the total revenues and are certainly high in relation to the capital costs of the GFIP. More specifically, from the outset, there has been a lack of transparency and clear explanations expressed around assumptions, projections, compliance rates, maintenance estimates, interest charges etc.

3. LACK OF TRANSPARENCY:

a. Despite our numerous requests, OUTA remains unsighted as to details of Government’s thorough evaluation of the Fuel Levy as a funding option, wherein the determination was made of its lack of suitability in lieu of the e-toll model.

b. We remain concerned that the entire ETC JV contract and other contracts are not open to the public (barring any specific intellectual property and patents). It is absurd to claim these are published on SANRAL’s website, whilst subjecting OUTA to sign confidentiality agreements to obtain these documents for the court process.

c. We can’t understand why requests from SANRAL for access to their tolling & funding models were dismissed as being ‘too complicated for the public to understand’.

4. TRANSPORT ALTERNATIVES: Suitable, safe and reliable public transport is lacking in the Gauteng area to be a viable alternative for road users:

a. GAUTRAIN serves a narrow North-South corridor which has both limited capacity during peak times, shorter than required operating hours and which has limited ticketing integration with other public transport services.

b. BRT/METRO RAIL in Gauteng’s main Metros is at early stages of implementation. Current roll out of the service is not at an adequate level of capacity to offer a reliable and economical alternative to GFIP.

5. ROUTE ALTENATIVES: It is widely acknowledged that current alternate routes are already congested with many in need of repair/upgrade, not to mention widespread congestion caused by poor traffic light maintenance and management. These do not afford the motorist a reasonable choice of alternative routes, especially during peak traffic times. Indeed, the South African Insurance Industry (SAIA) has already warned of increased claims due to further congestion caused by diversion from GFIP. Current plans to upgrade several alternate routes are welcome. We propose that these routes are not funded by e-tolling.

6. COMPLIANCE & ENFORCEMENT:

a. Legislative framework to enforce non-payment remains vague, with the incompleteness of AARTO throughout the region being unable to drive the mechanism of compliance. AARTO in itself, despite its years of testing, is still not effective and ready for implementation.

b. The potential impact and material cost of trying to manage enforcement through the criminal procedures act (CPA) will add immense pressure or costs to an already over strained justice system, as a result of the expected large scale non-compliance by Gauteng road users.

7. USER PAYS: It is important to see the GFIP as part of South Africa’s urban freeway system, and not to try and confine ownership to Gauteng for which Gauteng citizens must pay. The entire nation draws benefits from efficiencies experienced from better roads within this economic hub of the country. Despite the above, the theory of ‘user pay’ in this context is neither consistently nor equitably applied:

a. Exemptions granted to certain users, such as the taxi industry (which are normal businesses and not public transport) is not equitable and a farce. Taxis were never intended to have free passage at the outset of the intention to toll. This exemption was only introduced after the first announcements to toll in February 2011, when the threat of civil disobedience from the taxi industry became real.

b. Tariff caps mean that some users who exceed the cap no longer pay. Strictly speaking, this flies in the face of a “user pays” application.

c. Government tax funding for many other benefits to society are not based on a user pays process, including:

            i. Thousands of kilometres of un-tolled road upgrades in other parts of the country. Which users will pay for these roads?

            ii. Gautrain’s funding is heavily subsidized and this implies an inconsistency of government’s application of the ‘user pay’ principle.

            iii. Funding of various metro BRT plans will remain a challenge as these services will have to be subsidized and therefore do not comply with the ‘user pay’ principle.

            iv. The planned National Health Insurance (NHI).

            v. The introduction of subsidised trade and economic zones (such a Coega).

d. The current e-toll model relies on ‘owner’ pays and not ‘user’. This in itself has attracted significant additional administrative burdens and costs to the system and society. To deem the driver is the owner will subject vehicle owners to onerous work and conditions to provide proof to the contrary which is an impingement on their constitutional rights and privacy.

e. To imply that additional benefits such as median lighting and emergency services are part of the reason to toll is a farce. Why should these benefits not part of an urban freeway network as it is in other cities where median lighting and prompt emergency services on freeways exist on un-tolled routes?

f. The use of the fuel levy demonstrates a purer and far more efficient form of user pay than e-tolling.

8. ROADS DO NOT COME FOR FREE: Society does not expect its infrastructure improvements to be provided at no cost or consequence to its citizens. Society has no issue with paying for much needed freeway upgrades in Gauteng, however, what society respectfully requests in matters of such magnitude, is proper consultation and transparency with meaningful information and participation, before decisions are made. In this way unnecessary costs and burdens on society can be exposed and mitigated.

9. TRANSPORT AND TOLL REGULATOR: With mounting questions being raised, related to tolling in general throughout the country is concerned, there is a view that an independent transport regulator needs to be appointed.

Since the birth of our new democracy, we know of no issue that has provoked such ire and rejection from the public across all sectors of society, than this decision to toll Gauteng’s freeway upgrade. Surely you cannot ignore that fact which indicates that something is clearly amiss. The current extent of public participation and consultation after the fact, is far too little too late. Had the engagement process been undertaken properly (i.e. with absolute transparency and clarity) prior to the decision taken to toll, we believe the authorities would have received clear feedback from business and citizens that their plan (as it is currently being forced into being) is too costly, too inefficient, too cumbersome and in general too onerous a burden for society to accept.

We believe the freeway upgrade was necessary, but it may have happened to a lesser extent and a significant portion of the capital possibly diverted toward much needed public transport infrastructure requirements and other pressing needs. Maybe, maybe not, but sadly the opportunity to find out then was lost, as is being realised now.

The current high volume of rejection by society, as was displayed during the recent public hearings and submissions, is the result of insufficient homework and not understanding the gravity of the impacts that tolling of urban freeways will have in an overtaxed society such as ours. This has been further exacerbated by the limited and questionable research, along with ignoring the need to consult deep and wide on issues of such magnitude.

Furthermore, please realise the anger and frustration of society’s rejection of this ‘new tax’ should be heard within the context of an environment where there is a perceived disregard and waste of hard earned taxes through mal-administration, poor procurement practices and rampant corruption throughout the civil service. These are real issues that cannot be detached from the emotion generated by the decision to toll society’s daily commuter urban routes.

Finally and once again, we ask the Government to set this decision aside by introducing a temporary funding mechanism(s) or solution to re-pay the creditors and seek proper approval and trust from society for the introduction of this plan. To force this matter onto an unwilling society may have serious and dire unintended consequences and we ask with great respect that you do not take your citizens down this road.

Yours sincerely,

OUTA Chairperson