Thought leadership: Take that, SANRAL!

By Kim Kemp

Oft-times hailed as a modern-day Robin Hood, Wayne Duvenage is the CEO of the Organisation Undoing Tax Abuse, or OUTA, which has become South Africa’s only stay against the oppression of the looming e-tolls.

etollsThe huge groundswell against the e-tolls in Gauteng has resulted in an impasse, with SANRAL out of pocket to the tune of at least R11-billion, and increasing.
Image credit: Wikimedia

Outspoken, candid, and known for shooting from the hip, Duvenage responds to some of the questions raised during The Civil Engineering Contractor’s June interview with Louw Kannemeyer, South African National Roads Agency Limited’s (SANRAL’s) engineering executive.

One of the bones of contention around the e-toll system is that SANRAL didn’t ‘engage’ with the public. What could it have done differently prior to implementation to ensure buy-in from the public?

Duvenage is quick off the mark: “The extent of SANRAL’s public engagement was dismal to say the least. It was a ‘box-ticking exercise’ as opposed to meaningful engagement. All they did at the end of 2007 was place one advert in six newspapers, to request public comment on the e-toll scheme. They hid these adverts in some of the business sections (least-read parts) of the newspapers. The advert did not contain tariffs and other vital information.”

He outlines that in total, a mere 28 responses to these adverts were received and adds, “and yet, there were 3.5-million registered vehicles in Gauteng at the time. That in itself tells you, the people were not informed of the scheme.”

He stresses that there were no face-to-face public engagement sessions either, until the public outrage started, “long after the money was spent, and the gantries were [already] erected. In other words, the public engagement was meaningless, and they had little opportunity to engage or impact on the decision, which is why the constitution requires that meaningful public engagement must happen,” he points out. 

Duvenage cites two examples of successful public buy-in to a tolling system after public engagement: “In London and Stockholm where e-tolls were successfully implemented, there was widespread public engagement, which culminated in public acceptance after extra public transport needs were addressed and the tariffs were agreed to upfront by the people of those cities. In fact, in Stockholm, they tested the system with the public for six months, and then ran a referendum with the public at which they received 75% buy-in. So, it works well — when you get the public buy-in. SANRAL failed dismally in this regard,” he reiterates with irritation.

Word around our South African braais, however, is that outstanding e-toll fines, whether from fleet owners/operators and private drivers, will prevent renewing driving licenses should the fees remain unpaid.

Duvenage considers this and answers: “It appears that this is the intention of the amendments being sought in a bill to change the AARTO Act. However, consider this: If indeed the amendments to the Act seeks to place a block on license renewals for unpaid e-tolls, in effect, a national government system (e-tolls) is being used to ‘force’ a local government regulation (vehicle licensing) into effect.

“The same e-toll scheme was supposed to be implemented in the Western Cape in 2012. Fortunately, the City of Cape Town caught the plan ahead of time — probably because it was DA run and, in Gauteng’s case, it was ANC run at the time, so political pressure to question Gauteng’s tolls was less likely.”

“In other words, the local metros and municipalities’ revenues from vehicle licenses becomes negatively impacted. There is a conflict between the different levels of powers and their respective revenues in this regard, thus a big constitutional battle looms if this happens.

“Secondly, there are three-million registered vehicles with unpaid e-tolls; does government or SANRAL seriously believe they will block three-million vehicles from being relicensed? They cannot be selective and only block those vehicles above a certain amount outstanding. All vehicles owing will have to be blocked. In reality, we sincerely doubt this extent of ‘lawfare’ between the government and the people will ever happen,” he says with a degree of dismissiveness.

Okay, so despite our best efforts, the e-toll system has been in place since December 2013 and, whether or not we like it, there must have been a financial impact on the consumer down the line, what with the fee being added to haulage companies fleets and so on? What do you assess the damage at?

“It’s hard to say. All the trucking companies and businesses with fleets transporting freight, food, goods, and services have passed this cost on to the consumer (well, only the 25–30% paying). The best way to measure this is to see that over the past four years, there is a combined outstanding e-toll bill of close to R11-billion, largely from the people and businesses in Gauteng. There is very little hope or chance of SANRAL being able to suck this amount of money out of the Gauteng economy.”  

Realistically, are there benefits to the system, seriously?

Duvenage thinks for a moment and says, “Let’s put it this way. The benefits of e-tolling in cities where this has worked, have largely been due to the investment of the e-toll collections into improving integrated public transport systems and alternative options for the public to get to and from work. In the Gauteng case, all the money went to pay for a road upgrade — overpriced by around 100% — and nothing went into providing additional park-and-ride points, buses, trains and so on. When the toll money only goes to widen the roads, in the absence of improved public transport options, you get a phenomenon known as ‘induced congestion’, which means that more cars are attracted to the wider road network and within five to seven years, the roads are as congested again as prior to the widening. This is precisely what has happened here.

“So yes, benefits of congestion easing were obtained — for a while — but that’s now past. And what will they do now, build another lane? Where? The additional freeway links are long overdue by the provincial authorities.”

We all know — and chafe at the fact — that the money collected was going offshore. So, in a failed system, how much money did the overseas collection company make on the deal? Word is, nothing, and that they are champing at the bit to end the contract?

The CEO chuckles and responds, “They certainly didn’t get what they were counting on. Initially, the tender was secured on their (ETC) bid for over R1-billion per annum income — and increasing — to operate the system. But, over the past few years, they’ve got less than R800-million per annum — and declining. SANRAL got next to nothing due to the failed compliance levels. Had they achieved the income of around R3-billion they sought, based on around 93% compliance, they would have effectively achieved an extra R2-billion for themselves per annum. Effectively, SANRAL would have earned 21% of their national tolling income from 1% of their freeway network. A case of overtaxing the economic cash cow in Gauteng,” Duvenage adds with evident contempt.

As OUTA has made such a concerted stand against the tolls, in retrospect, what was its involvement while the tolls were being built?

“One needs to understand that the tolls and the freeway upgrade are two different matters. The e-tolls is just a financing mechanism for a freeway upgrade. Virtually the entire public was unaware of the e-toll decision taken to pay for the freeway upgrade, until they saw the gantries being built in Q3 of 2010.  

“In the absence of a meaningful public engagement programme, like any social infrastructure upgrade, this project was largely taken as being financed by normal taxes, just as all urban freeways were built in the past, when these became congested owing to growth of the economy.

“Furthermore, OUTA did not exist at the time the Gauteng freeways were being built (2008 to 2011). OUTA was only formed in Feb 2012.”

This came about through the combined efforts of the South African Vehicle Renting and Leasing Association (SAVRALA), the Retail Motor Industries (RMI), South African National Consumers Union (SANCU), Southern Africa Tourism Services Association (SATSA), and the QuadPara Association of South Africa (QASA), Duvenage explains. 

“SAVRALA attended one meeting in Centurion in the winter of 2008 (after the e-toll decision had been taken), where SANRAL gave a high-level discussion on a number of things, including a new electronic tolling scheme they had for the Gauteng freeways. However, they did not give sufficient detail to direct any decision-making or understanding of how the scheme might impact their industry at the time. 

“When asked to give more input, SANRAL said they would engage with the car rental industry at a future date — which they never did. Besides, as I indicated earlier, the e-toll decision had already been taken, so this late engagement was meaningless.

“One must ask oneself, how was it possible that the biggest fleet operators (car rental, road freight industry, courier companies and the like) were not aware of the scheme until the end of 2010, when the upgrade was almost complete — four years after the decision was signed off by government? Again, a sign of sheer lack of meaningful public engagement by SANRAL.”

Anything you would like to bring attention to, or get off your chest?

Duvenage takes the opportunity keenly and says: “I was the CEO of Avis at the time and the chairperson of SAVRALA. All my industry colleagues will confirm, no-one knew anything about the scheme until it was too late. SANRAL kept this well under the radar from the public and then sprung it on them at the last minute, so to speak, when it was too late to object.  

“Take note of this: the same e-toll scheme was supposed to be implemented in the Western Cape in 2012. Fortunately, the City of Cape Town caught the plan ahead of time — probably because it was DA run and, in Gauteng’s case, it was ANC run at the time, so political pressure to question Gauteng’s tolls was less likely.

“Cape Town managed to halt it in its tracks, based on poor public engagement, high costs, and administrative challenges — the same problems the Gauteng system suffered from. All three courts ruled against SANRAL (High Court, Supreme Court of Appeal, and the Constitutional Court) on the Western Cape scheme. The only reason the Gauteng scheme was allowed to proceed, was due to the fact that the money had been borrowed and the roads already built, which doesn’t make it right,” he adds pointedly.

Duvenage adds in conclusion: “In reality, SANRAL has misled the public and run roughshod over due process.”

wayne small mm Wayne Duvenage is both founder and recognised face of OUTA, South Africa’s voice in a world of enforced silence.
Image credit: www.dailymaverick.co.za 
 
“There are three-million registered vehicles with unpaid e-tolls; does government or SANRAL seriously believe they will block three-million vehicles from being relicensed?”

Note: For OUTA’s formal position paper on the e-toll issue, download here 


 

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