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E-toll panel report: The Good, the Bad and the Elephant

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Wayne Duvenage is a businessman and entrepreneur turned civil activist. Following former positions as CEO of AVIS and President of SA Vehicle Renting and Leasing Association, Duvenage has headed the Organisation Undoing Tax Abuse since its inception in 2012.

Having now gone through Premier David Makhura’s E-toll Panel review, its report and the stakeholder workshops, when cutting through the clutter, those who are responsible for unscrambling the e-toll eggs (the parliamentary portfolio committee, the Minister of Transport and the Presidency), are left with an enriched understanding of why Gauteng’s e-tolls make no sense. The panel has left them with a set of recommendations that will leave the cure worse than the disease.

Following the review process, a few stark issues are illustrated. These are, in brief, discussed below.

Public outrage justified, but not disobedience?

The report confirms that Sanral’s public consultation process fell short of expectations and the poor will suffer far more than their economists cared to recognise. These factors have vindicated the public’s negative sentiment and outrage; however, confusingly, the panel then suggests the public were out of line for disobeying the law and not paying for the use of the roads.

This makes one ponder the logic of these contradictory statements. Did the Panel really think that if all road users paid their e-toll bills and raised their concerns, that maybe, just maybe, Sanral or the authorities would have looked into the matter? Seriously? Civil disobedience is a justified response to irrational and unjust laws and e-tolls is no exception to that reality.

The legal boxes ticked, but Sanral can’t enforce?

The Panel suggests that Sanral have ticked all the legal boxes, yet they overlook the reasons as to why any attempt to criminalise motorists for non-payment of e-tolls will be extremely difficult, if not impossible to apply.

The mere fact that a year has passed without a summons issued, bearing in mind that Sanral threatened at length to prosecute non-payers, suggests their ’Rule by Law’ strategy appears very weak on this matter. In essence, the scheme and its laws now suffer from a crisis of legitimacy.

An odious debt, with little action from Sanral.

The panel has gone into detail about the questionable road construction costs and suggests that Sanral takes action to claw the money back from the collusive construction companies. They even go so far as to suggest that Sanral should hastily reach an out of court settlement.

However, anyone who knows the long-standing and close relationship that Sanral has enjoyed with the construction industry, even at times defending their rights (as in the current legal action in the Western Cape toll saga), will know that society will draw the short stick in this instance. As Tyree Scott once said, “you can’t leave those who created the problem in charge of finding the solution”.

The panel was not hard enough on the initial problem of why Sanral, with all its expertise in road pricing and project costing, was hoodwinked by the construction companies in the first place. What mechanisms did they have to prevent such gross overcharging (some estimate at well over 50%) and why or how did Sanral fall short of protecting society from this abuse?

Until Sanral displays extreme transparency on the road construction overcharge issue, both Sanral and the construction companies stand to be served with a public class action to fetch all the money due to society. A quick out of court settlement will not do. Civil disobedience against an odious debt is almost obligatory.

A hybrid of increased complexity, in the presence of a simplified existing solution is absurd

By suggesting that the e-toll mechanism should remain as the major component of funding, in their myriad of options proposed, the panel has clearly chosen not to deal with the elephant in the room, which is the failed e-toll scheme. The panel does not propose how the scheme could be resurrected from its current position of mass rejection.

Furthermore, the Panel’s proposal suggests that Sanral’s 100% e-toll base begins with an e-toll levy for cars set at R0.57c per kilometer. Yet Sanral’s current fee of R0.30c per kilometer would raise all the revenue required, in the event that all motorists complied by fitting e-tags. Where is the logic of the proposed increase in the e-toll tariff to almost double the current e-tag amount?

The suggestion of fitting new vehicles registered with an e-tag is unsustainable, as is the suggestion to lower the cap. The issue is not about the tariff or its cap. The scheme’s rejection is about the high irrational costs of collection along with the numerous companies that enjoy the contracts attached to the scheme. It’s about the lack of public engagement or transparency and a mistrust that surrounds the scheme, which is worsened within an environment of a corrupt government that squanders the nation’s taxes on a daily basis. These are the underlying reasons why the Gauteng motorists refuse to be taken for granted and why the e-toll scheme will never work.

The authorities have the power to apply the suggested tyre taxes, or add more to the vehicle license fees, or to introduce a provincial fuel levy. Throw in a windscreen wiper tax if you must, but all of these come with significant unintended consequences, and higher costs of administration, with more society fall out.

The question that the Panel ought to have asked is why the national authorities are so intent on going down this road of added complexity and high costs to society. Especially when an existing policy of channeling national fiscus revenues directly to Sanral for road building exists. The Government could easily take over or guarantee the PIC bonds issued to Sanral for the GFIP capital. Why did the Panel not offer this option as one of the proposals for the Premier to take to his national cohorts?

The shocking reality is this: Had Treasury added ten cents to the fuel levy back in 2008, when the freeway construction began, by today, the capital costs of the project would have been raised. In fact, some say that Treasury has already done just that. The fuel levy has already been increased by R1.22 (or 110%) to R2.34 since the GFIP construction began.

In light of the above and the ongoing impasse, one must ask what the real motive behind the ruling party’s national executive is on the matter? Why are they so intent to continue the fight with the citizens of Gauteng, generating unnecessary conflict between the public and the state, and placing the Gauteng ANC at risk for the 2016 local elections?

It is this irrationality that leaves society’s speculation to run wild on what really lies behind the stink that surrounds the e-toll decision. DM

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