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ANALYSIS

Straight Outa E-tolls — important lessons from the first taxpayer revolt in democratic SA

Straight Outa E-tolls — important lessons from the first taxpayer revolt in democratic SA
Cosatu members protest against the pending e-toll system on the N1 south on 11 February 2013, Pretoria, South Africa. (Photo: Gallo Images / Foto24 / Theana Breugem)

The gazetting of the withdrawal of the declaration of highways in Gauteng as tolled roads marks the end of the first taxpayer revolt in democratic South Africa. In the end, it was the government’s failure to prosecute people who refused to pay that made it fail. There are many lessons for governance here, including how difficult it can be to ensure the rule of law.

The roots of the failure of e-tolls go back to at least 2006. By that date, traffic in Gauteng had increased to the point where the highways between Joburg and Tshwane, and OR Tambo International Airport were often parking lots.

Advocates phoned radio stations saying they had left their homes in Tshwane before 7am, only to be late for a case in Joburg three hours later. At times, it was impossible to move. 

This was in an era very different to the present one. Zoom was the sound of someone arriving late for a meeting, while hybrid working was mostly science fiction. 

Before SA hosted the Fifa World Cup in 2010, the government acted to deal with the anticipated traffic congestion. The Gautrain was launched and highways in Gauteng were widened, which involved tolling them to pay for the construction of the new lanes.

However, someone in government forgot to ask the residents of Gauteng what they thought of this. There were adverts in newspapers, but no consultation.

This was pointed out to national government officials and the Transport Ministry, but they believed they would be able to force the system on the people of Gauteng.

The people had other ideas.

As we noted 11 years ago, this led to South Africa’s first-ever multiclass movement against a decision by the government. Corporate leaders, like then Avis MD Wayne Duvenage, marched shoulder to shoulder with Cosatu in Gauteng against the e-tolls.

Analysis: The eTolls showdown this way comes

In 2014, the DA made a large cash donation to the organisation opposing e-tolls, Outa, which was led by Duvenage. It was designed to feed into the election campaign of that year. A comment by the DA leader at the time, Helen Zille, still has immense power. 

She said, “People who live in the Western Cape don’t have toll roads, and won’t have toll roads, because they voted for the DA. People in Gauteng will have toll roads because they voted for the ANC.” 

Dividing the alliance

Importantly, Cosatu did not drop its opposition to e-tolls or its support for Outa over this. This was a demonstration of what appeared to be an important DA strategy at the time, to divide the alliance of the ANC, the SA Communist Party (SACP) and Cosatu.

The SACP came under intense pressure.

For much of the time that e-tolls were being introduced, the first deputy general secretary of the SACP was Jeremy Cronin, who was also the deputy minister of transport.

As we pointed out at the time, the SACP was largely silent on the issue.

Less silent was the Gauteng ANC. They had been against e-tolls from the start. They knew how big an issue this would be in Gauteng and how badly it would cost them at the polls.

The fact that current Gauteng Premier Panyaza Lesufi was quick to do a broadcast media tour after this weekend’s announcement ending e-tolls shows just how potent an issue this still is.

Soon after the introduction of e-tolls, the other big mistake by the national government became apparent.

It had no mechanism to force people to pay.

There were no physical boundaries to the toll roads, and motorists were asked to pay using e-tags, failing which they faced prosecution for non-payment.

Fancy Sanral shops were opened to deal with the predicted demand for e-tags.

They remained open and customer-free for many years.

Outa promised that it would pay to defend any person charged with not paying their toll fees. Worried about their legal case, the transport department opted not to charge anyone.

The government had only one lever left to enforce e-toll payment — the threat that Gauteng would not renew the vehicle licences of owners with outstanding e-toll debts.

However, that lever too broke after insurance companies promised that expired vehicle licences would not invalidate insurance claims.

E-toll collection rates dwindled, and the only people left paying were car rental companies, government departments and firms run by accountants worried about contingent liabilities.

The lessons

There are many important governance lessons from this.

The first is that in South Africa, consultation is vital. You cannot govern without it. People demand to be heard. If you ignore them, prepare for mass action, protests and a failure to govern.

The second is that if you impose a law, you have to be able to enforce it. If you can’t enforce it, then don’t introduce it.

The government did not heed these lessons.

In 2020, six years after it was clear e-tolling was never going to work, the government made a similar blunder.

It banned the sale of cigarettes, despite being unable to stamp out the illicit tobacco industry.

The result was that the illicit industry grew dramatically, and today, about 70% of all cigarettes sold in South Africa are illegally produced and untaxed. (This must surely contribute to the fact that more than 30,000 people in SA die from smoking-related illnesses every year.)

The third lesson is to know when to stop.

On Tuesday, Lesufi was asked on SAfm about the negotiations with the national government to end the e-tolling system. These talks must have included discussions about who will now pay for the debt which has accrued.

As Lesufi described it, it was a “massive fight. At one stage I felt we might have to pull out of the negotiations. It was difficult, it was uphill, harsh, uncompromising. But we were firm in our resolve that this matter must be finalised as quickly as possible, because it’s affecting the development of our province.”

(Left unsaid was, of course, that it was affecting the ANC’s chances at the upcoming polls. — Ed)

From this comment, it appears the national government was determined to continue with the system, mainly because of the dispute over how to repay the money.

This was madness.

In August 2019, nearly five years ago, it was so obvious that the system was not working that the transport minister at the time, Fikile Mbalula, promised there would be some kind of “solution” by the end of August that year.

It was not the first, and it won’t be the last, promise broken by Mbalula. 

This meant that the national government allowed the system to continue failing, knowing it wasn’t working, because of its dispute with the provincial government over the situation it had itself created.

That was the biggest governance lesson the saga provided: to know when you have made a mistake and to admit it.

This is often the hardest thing for governments to do. Long after everyone knows a mistake has been made, governments allow a situation to get worse and the costs to mount up, simply because making the decision to correct it is too hard.

People devoted time, money and resources in the fight against e-tolls. They did this out of democratic principle. Wayne Duvenage and Co deserve their moment of celebration.

However, it will be some time before the question of whether those who govern have learnt from this debacle is answered. DM

Gallery

Comments - Please in order to comment.

  • Anil Maharaj says:

    As usual Lesufi is trying to claim credit for the removal of this travesty. What a shameless politician this guy is. Much like his fellow cadres.
    Anyway, he won’t be around for much longer.

  • Karl Sittlinger says:

    You kind of missed two really important reasons etolls failed:

    In true ANC style, the European partner (Kapsch I think they are called) imposed some very serious costs and unfavorable contracts on the etoll payers and South Africa, with the bulk of the money collected not going to the fiscus or road agency, but to that Austrian company. One really has to wonder who got “incentivised” when concluding these ridiculous contracts.
    Secondly, tolling the main artery between two of the most busy industry centers in SA, without a proper alternatives means that you are now forcing a cost on anyone that has the misfortune to have to commute. Alternate roads were heavily neglected to a point that they were just about unusable. Its one thing to toll an alternate but faster road, or a scenic path, it’s quite another if you toll the only functional road you need for your daily commute.

    • Fanie Rajesh Ngabiso says:

      …so as a visitor to Jozie, I specifically noticed how good the e-toll roads were when compared to the terribly potholed normal Joburg roads.

      Without getting into the e-toll right/wrong topic, I can’t help wondering what is going to happen to the state of these roads when the dedicated funding stops and they are handed over to our illustrious ANC government to run.

      Is this possibly a case of frying pan and fire?

      To Helen Zille’s point, it is likely best to vote DA and not have to find out.

  • Alley Cat says:

    I am a believer in e-tolls in principle, they are used to good effect in many countries around the world and they rightly charge only the people who use those roads.
    That said, I never paid one cent for e-tolls, simply because we were never told details of the contract, and when it was disclosed that some 70% of the revenue would go to a foreign firm, that was the end of the discussion for me.
    Well done OUTA, THANK YOU!!!

    • J vN says:

      I don’t use government health care, government policing or government education for my kids. If user-pays is an actual thing, my taxes should immediately be reduced by 95%.

  • William Kelly says:

    Lesufi and his camera moments. Cringeworthy – what a muppet. Contrast that with Duvenage claiming this was ‘just’ a team effort and shying away from the limelight.
    Our much vaunted local contractors that plundered the public purse escalating costs from R7B to R18B still require accountability. Someone got bribed there. Who?
    And the European plunderers, ahem, I mean partners. Someone got bribed there. Who?
    Nazi Alweer has questions, many questions, still to answer.
    As I have said before however, the good thing that came out of this is OUTA. It is an admirable organisation.

  • Gerrie Pretorius says:

    “Those who (currently) ‘govern/rule’ can and will never learn from any debacle, ever. That’s just the way of the anc.

  • J vN says:

    Outa and the public revolt against the SABC and eTolls have shown us the way. Forget the ballot box; the majority of SA’s voters aren’t informed enough to make intelligent choices. Hit the cadres where it really hurts, in their pockets. Make them get out of their Bentleys and onto the bicycles that their lack of skills and honesty actually deserve, by starving them of taxes. Next target: municipal rates, then a large-scale corporate tax revolt. Sooner or later, even the heretofore spineless business sector will grow a pair, and the day that happens, all bets are off for the thieving cadres.

    • John Brodrick says:

      “…the majority of SA’s voters aren’t informed enough to make intelligent choices”: by implication, you are informed enough to make intelligent choices. Such arrogance is breath-taking. Give the majority of SA’s voters a truly viable alternative, and then see what happens. Try to see things from the point of view of those who have suffered under – and are still suffering consequences from – the thoughtless arrogance of those voters who kept the NP in power – largely unchecked – for 46 years, in spite of the tangible damage that it was doing to the country and its people, and you may see more logic in their current choices than is immediately evident. I am not defending the corruption and incompetence that has characterised the ANC government; I am merely appealing for a more nuanced and balanced understanding of the choices people make at the ballot box. If you were one of the voters earning anything from 150 to 1500 times less than your CEO and his colleagues were being paid, would you support any party that embraces the kind of economic thinking that produces such a result? I doubt it.

      • Middle aged Mike says:

        If you vote for people with a 30 year track record of theft and the destruction of the country’s infrastructure you are a stupid muppet just as those who voted for the neo nazi ossewa brandwagters of the NP were. Call a spade a spade and don’t make weak excuses for criminally stupid electoral choices.

      • J vN says:

        There can be no nuances here. Somebody who persists in voting for a criminal, corrupt, incompetent government, is stupid and it is high time those who do so, get told to their faces that their own stupidity at the ballot box, leads to their own misery.

        Enough with the beating around the bush. SA doesn’t have an ANC problem. It has a voter problem.

        • John Brodrick says:

          Just whom do you suggest people should vote for then? It is just possible that people who vote as you suggest may be doing so because they regard the system that has the support of the major opposition parties as just as corrupt, and while perhaps not incompetent, competent mainly at exploiting the masses. The Joostes of the world are not as rare as some imagine. It took other South Africans 46 years to come to their senses. Perhaps 30 years is a short period by comparison.

          • J vN says:

            There are quite literally hundreds of parties, except for the ANC to vote for. Just stop attempting to excuse terminal stupidity already. South African voters very urgently need to start making more intelligent voting choices, but your looking for excuses for voting stupidity, isn’t helpful. Time for the vottahs to grow up and man up.

          • Denise Smit says:

            You must be someone with two passports able to flee when you need to

          • Fanie Rajesh Ngabiso says:

            The DA. Duuuh

        • Nick Griffon says:

          I cannot agree more.
          The voters claimed they want democracy but they are wasting it. If they get angry with the ANC they “punish” the ANC by not voting. How dumb can you get??
          Democracy only works when the voters can read for meaning and understand the concept. The majority of SA voters can’t and don’t.

    • Warren Moir says:

      The big thing not spoken is on the ‘who will pay for this’ question.
      I suspect it will work out costing every taxpayer through the national budget…

      Here’s a hypothetical then; by the fact that it’s being gazetted to be removed, it has been acknowledged that a massive mistake was made and e-tolls were illegal from the outset. Then the question, who will then be responsible for making that mistake? Will it be the former head of SANRAL to make it to the dock? Will it be him and the team that evaluated the bid and signed off on the project in the first place? Will it be him (including most management), that team plus the Minister of Public Transport of the time?
      One more, if the MPT, is called into the dock, can the ANC then be sued for overall negligence in governance practise and then be compelled to pay the debt?…
      I mean it’s only hypothetical, but the smell of class action is tasty.

    • Paul B says:

      Business have demonstrated that they have learnt nothing since the Apartheid days. They cozy up to the regime of the day, and remain silent, due to the fear of falling out.

      I read an article yesterday that said should an ANC/EFF coalition govern, Business Unity South Africa will continue to engage and fund them.

      What we need is the business sector to grow a pair. Then there’s also the likes of Adriaan Basson, and Naspers, but not even going to go there.

  • Geoff Coles says:

    Ah World Cup 2010….remember the time too when we had to pay for fuel with hard cash, not with a credit card.

  • Colin Johnston says:

    It’s a pity that the introduction of e-tolls on urban roads was so poorly managed and therefore unsuccessful. I once confronted Wayne Duvenage on a radio talk show and asked why he was encouraging people to break the law which is actually what OUTA was doing. I’m not sure that government has to consult the public on all management issues. That would be painful and make government almost impossible. But clearly there were mistakes made here that the roads authorities should have foreseen. A pity.

    • Middle aged Mike says:

      There were no mistakes made beyond underestimating the resistance that this particular ANC scam would elicit. A complex, opaque and massively expensive collection mechanism was implemented to pay for a fraudulently inflated capital project. This was done precisely so that public money could be funneled offshore to unknown beneficiaries for a ‘service’ that could have been delivered at no extra cost via the existing fuel levy collection system. If you elect to obey thieves and fraudsters and help them in the conduct of their criminal schemes just because a majority of morons vote for them knock yourself out.

      • Con Tester says:

        Indeed. I’m always puzzled when non-governmental defenders of e-Scam pop out of the woodwork with some confected, and obviously sorely researched, natterings about “good system” and “efficiency” and “it’s the law” and similar.

        You don’t need a doctorate in engineering or accounting or project management to see that the e-Steal scheme was cooked up primarily to keep the cadres’ feeding trough filled, with road infrastructure development and maintenance coming a distant second.

    • District Six says:

      Public consultation is necessary. Citizens were expected to pay for it, and the state has a duty to consult us. This didn’t happen, and was probably the single reason SANRAL did not want to go to court with OUTA, because they would have lost on the lack of public consultation process.

      That’s also not “a management issue.” Public consultation is a fundamental constitutional principle.

      Even the DA was against it. As part of their ill-conceived “fart back” strategy, no doubt. #EtollsMustFall

    • Denise Smit says:

      He asked people not to pay but when you gave in your rental car your e-tolls had to be paid. Or did that exclude AVIS Mr Duvenhage?

    • Denise Smit says:

      You were asked not to pay etolls, but when you gave in your rental car your e-tolls had to be paid. Or did that exclude AVIS Mr Duvenhage?

  • Notinmyname Fang says:

    Bravo OUTA!!

  • Dulcie Marks says:

    Some countries do have effective and very well run e-tolls, but as Alley Cat states you only pay when you use them. As in Dubai. The big thing here is the people don’t pay income tax, so they are happy to pay. You have a card and you buy credits on it, and the charges are automatically deducted when you pass under a bridge etc. Works beautifully and we know what their roads look like !! I think our ANC cadres visited Dubai and thought ” Ah, here is another way we can skelm some money out of the masses”, but didn’t have a clue about the system, the resilience of the SA people and OUTA. Truly well done !!

  • Con Tester says:

    “In the end, it was the government’s failure to prosecute people who refused to pay that made it fail.”

    and

    “[National government] had no mechanism to force people to pay [e-Tolls].”

    Stephen, I think you seriously underestimate the resolve of Gauteng’s drivers to see the back of e-Theft. People *were* threatened in various ways, including arrest and the withholding of road licences, and still the mass defiance continued, and even escalated. These threats would probably have been far more effective ten years earlier, but Gauteng’s motorists, on the whole, were terminally fed up with the ANC’s ineptitude, malfeasance, and smug, pontificating arrogance.

    That aside, the rest of your analysis hits the right spot.

  • Iam Fedup says:

    The biggest lesson in all this? Don’t pay your taxes. I’m a citizen of two countries, and I’m meticulous about paying every last penny to the one that gives me services, and that doesn’t steal from its own citizens. But I hide and avoid whatever I can in SA. I cannot consciously support the crooks and criminals of this country while children die of hunger, disease and poverty. The bottom line is that if the cowardly CEOs of the banks and major retailers took the same stance as the citizens of SA via the courageous OUTA, this dreadful bunch of scoundrels would not last another month. They don’t have intelligence or the insight to deal with mass action. And, by the way, one needs to remember that the ANC used exactly this tactic with their reasonably successful boycotts and their desire to make our country ungovernable. Time to give them a firm kick in the backside, and jail the thousands that have openly stolen from us. I know an island off the coast in Cape Town that could do an admirable job of isolating them from the rest of us.

  • Malcolm Mitchell says:

    After all the outcry the principle is sound and used worldwide.
    With the diminishing income from fuel levies into the future as a result inter alia of electric cars, funding for roads will have to be found elsewhere – increased income taxes?? The major problem here has been the inadequacy of the implementation of etolls by an earlier CEO of SANRAL who did not follow acceptable public consultation procedures nor bother to sell toll roads as was done circa 1984,.

    • Middle aged Mike says:

      There are precious few intra urban toll road systems in the world that are successful and there were two major examples of failed schemes that were similar to GFIP in Portugal and Canada. This was done to funnel money to connected cadres full stop. It beggars belief that anyone could see merit in a system that has a many times multiple cost of collection over the fuel levy collection system. We already paid for 85% of the highway system to which this scam was applied and continued to pay for it through the enormous percentage of tax levied on fuel as well as vehicle licenses.

      • Malcolm Mitchell says:

        Mike, I think you did not get my main point. You must be aware that income from fuel levies is diminishing and will eventually dry up because of the move to electric vehicles -simple to understand surely!! Your facts are inaccurate about urban toll road systems and your “”85%”” quote is understandable. Any even inexperienced road engineer knows that roads need regular upgrading to be able to comply with increasing traffic volumes! Reference Road Engineering 101 course!!

  • D Rod says:

    Now, can we do something about exorbitant rates that we pay for this crumbling city? The same one that ANC doubt “World class African city”. The one with water shortage, massive homeless problem, potholes, crime in the top 10 in the world, with corrupt officials not interested in enforcing bylaws, etc. I will be the first one to sign-up for it…

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