Tag: e-tolls

The government has proposed new laws following the dismal failure of e-tolling revenue collection from Gauteng motorists, who owe more than R6-billion in unpaid tolls.
The purpose of the South African National Roads Agency Limited and National Roads Amendment Bill is to amend previous road acts to address the public outcry which arose as a result of the implementation of the Gauteng Freeway Improvement Project.

When e-tolls were introduced in 2013 as part of the project, motorists accused Sanral of not conducting proper consultation. To ensure this does not happen in other provinces, Sanral is amending the bill that governs e-tolling.

Disastrous consequences

The proposed amendments to the bill will give provincial and municipal governments more power in the implementation of e-tolls.The amendment bill acknowledges the disastrous consequences in Gauteng and aims to prevent them. The proposed bill further states that “the manner in which the public consultation process was conducted on this project was not to the satisfaction of the public, and there is a need to strengthen consultation”.

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They now want to give more power to premiers and municipal governments with regard to the roads that will be tolled. The premier will be given at least 30 days to hear out objections on a road that has been flagged for tolling. If objections are more than 55 percent the premier will have to call for a referendum within six weeks.

In the amendments, Sanral is also required to, before tolling the roads, identify “an alternative route of comparable distance, which must be a tar road, be maintained adequately and be suitable for increased usage”.

Review

In June transport minister Joe Maswanganyi said the South African government would once again review Gauteng’s e-toll policy, in the hope that a better one could be found.

“We want to come up with a tolling policy that our people will actually accept,” he said. “We are not closing our ears to what people are saying – we are working with the government of Gauteng and with Sanral, and at the end of the day, we believe we will come up with a policy on tolling that will be acceptable.”

Organisation Undoing Tax Abuse chairman Wayne Duvenage on Sunday welcomed the e-toll Plan B and believed the amendments would go a long way in protecting motorists.

“It will be better if the consultations are done by the National Council of Provinces and provinces which are affected,” he said. “This will mean the public is consulted meaningfully, unlike in the Gauteng Freeway Improvement Project – which is why it failed.”

Challenge to e-tolling

He said that if provinces were consulted, e-tolling would not be implemented – as in the case of Western Cape. Sanral wanted to toll the N1 and N2 Cape Winelands highways, but the City of Cape Town took Sanral to court in 2015, challenging the tolling of the roads.

The court set aside Sanral’s decision to toll the roads – and this, Duvenage thinks, is what will happen in most provinces.

“If they had made proper consultations in Gauteng, we don’t believe the roads would have been tolled,” he said. “It doesn’t mean that the freeway would not have been upgraded – it just would have been paid for differently. It is good that this legislation is coming through.”

He said the scheme would likely fail in other provinces.

“I don’t think other provinces will ever get e-tolls because they go beyond getting the public to buy in. It goes to the ability to administer the scheme.

Failed eNatis system

“We have a failed eNatis system and we have problems with the administration of traffic fines, and so we believe the context of the environment is one which e-tolling will fail in South Africa,” Duvenage said. He added that while e-tolling in other provinces would not take off, it would also fail further in Gauteng.

“We believe the e-tolls in Gauteng will not be around for much longer, and the reason is that the five-year collection tender comes up for renewal in just over a year,” he said. “We believe they won’t go out for tender because they are not even collecting the amount of money required.”

In February Gauteng premier David Makhura said the e-tolling system was a mistake and that no new tolled roads would be introduced in the province. It was revealed in Parliament by the Department of Transport in June that more than 70 percent of e-tolls issued were not paid by motorists.

Sanral spokesperson Vusi Mona was unavailable for comment.

By Tebogo Monama for IOL

E-toll mess just gets messier

Sanral may have to restart the legal process from scratch should it want to recover the money it claims it’s owed, or abandon the cases entirely.

Last week, the Organisation Undoing Tax Abuse (Outa) barred roads agency Sanral from pleading 55 cases against its members in court on the grounds that it had not followed court procedures and had delayed presenting its cases in court. These 55 cases represent nearly R2-million in outstanding e-tolls.

What this means is that Sanral may have to restart the legal process from scratch should it want to recover the money it claims it’s owed, or abandon the cases entirely. The roads agency has issued several thousand summonses to collect outstanding e-tolls and has obtained default judgement against some who failed to put up a defence in court. Though Sanral has trumpeted these default judgments as precedent-setting victories, Outa says they are nothing of the sort. They merely mean the defendants failed to show up in court and argue the case.

Outa is defending roughly 150 summonses issued against its members, roughly a third of which it says have now been barred.

Sanral is attempting to recover about R11bn in outstanding e-tolls from Gauteng motorists. Some 3m motorists are reckoned to owe e-tolls, out of 3,5-4m registered motorists in the province.

As usual, Outa and Sanral have entirely different interpretations of the same facts. Says Vusi Mona, Sanral’s GM for communications: “There are no matters in which Sanral has been barred from pleading. There have been ongoing engagements with Outa’s attorneys for agreed timeframes for the exchange of pleadings and there are no operative bars against Sanral.”

Both Sanral and Outa had previously agreed to run a “test case” which would serve as a legal precedent, so as to avoid clogging the courts with thousands of cases. Last month, Outa pulled out of the test case process as this was taking too long to get to court, opting instead to lodge papers in the high court in Pretoria in defence of one of its members, Thandanani Truckers and Hauliers, which outlines its opposition to e-tolls.

“We were aware that while developing the complicated e-toll test case process, Sanral was issuing default judgments and declarations against the general public, in the belief they would be able to secure a precedent-setting case,” says Ben Theron, Outa’s chief operating officer. “One would have thought Sanral would have learnt by now that coercion and intimidation have not worked in the past and will not resolve the entity’s mounting debt.

“As far as Outa is concerned, Sanral’s journey of following an extensive litigation process to collect outstanding debt will take years to unfold and is a significant waste of the courts’ time and taxpayers’ money,” says Theron.

Another potential problem for Sanral is the issue of prescription in terms of the Prescription Act, which makes it difficult for creditors to recover debts older than three years.

Who is going to criminalise 3m motorists? We know what happens to governments who go to war with their own people on issues such as this
E-tolls came into being in December 2013, so any outstanding e-tolls from December 2013 to May 2014 may have to be written off by Sanral. Outa chairman Wayne Duvenage reckons that more than R1bn of the outstanding e-tolls have now prescribed and are therefore unrecoverable by Sanral. And it’s getting worse every day.

Sanral’s Mona takes a different view: “To date, the issue of prescription has not been raised by any defendant in any matter where Sanral has sought payment of outstanding e-tolls. In any event, the failure to pay e-tolls is a criminal offence which is not subject to prescription.”

Sanral is relying on the Administrative Adjudication of Road Traffic Offences (Aarto) Act, which criminalises certain traffic-related offences in the Joburg and Pretoria metropolitan areas.
Wayne Duvenage
A legal expert specialising in prescription told Moneyweb that Sanral is treading on thin ground if it is relying on Aarto to recover its debts. “Sanral’s attempts to recover debts is a civil matter, and the Prescription Act applies. If I was defending clients summonsed by Sanral I would argue this vigorously and have any debt older than three years thrown out. I doubt any court is going to look at this as a criminal matter.

“Another point I would argue is that Sanral is potentially engaging in reckless lending in terms of the National Credit Act, since it is effectively issuing credit without doing the requisite credit assessment, despite the fact that Sanral says it is exempt from the NCA.”

Duvenage says the matter of prescription is likely to be contested by Sanral but any entity attempting to criminalise 3m defaulting motorists through the courts is playing with fire. Who is going to criminalise 3m motorists? We know what happens to governments who go to war with their own people on issues such as this.”

Theron says despite warnings from civil society that the Gauteng e-toll scheme would collapse due to its cumbersome, costly and burdensome administrative processes, Sanral and the department of transport have decided to continue their litigious war against motorists.

Meanwhile, earlier this month, Sanral announced that it had cancelled all future bond auctions pending the outcome of a governmental task team inquiry into road funding. Sanral needs to borrow about R600m/month to cover its interest bill and operations, but the auctions have been poorly supported over the last year. Sanral says it has enough cash to last a few months. Institutional investors and rating agencies are increasingly concerned at the state of governance in state-owned companies, which means the government will be left to pick up the tab.

Source: MoneyWeb

The South African Roads Agency (Sanral) has begun serving members of the public with letters of demand for outstanding debt on e-tolls.

However, the Organisation Undoing Tax Abuse (Outa) says “letters of final demand” should not be confused with a summons, as it is a low commitment step that does not officially initiate legal proceedings.

Last month, Sanral said e-toll defaulters may start receiving civil summonses from sheriffs in different jurisdictions in Gauteng.

Electronic Toll Collection, the company responsible for collecting e-toll payments, has also warned motorists not complying with the system should expect “intensified collection activity”.

Outa points out Sanral’s past behaviour and processes have laid the ground for a very strong defence in the form of a collateral challenge against the roads agency, if and when a summons arises for non-payment of e-tolls.

“For instance, we have examples of motorists who have previously been compliant and eventually gave up due to the scheme’s failure to account for and manage their queries and billing errors raised on their invoices,” says Wayne Duvenage, Outa chairman.

“Others have never received invoices in accordance with the scheme’s rules, while in other cases, incorrect bills were not removed from their accounts due to a cumbersome and ineffective dispute resolution mechanism.”

Outa points out that “for motorists that have entered into an agreement with Sanral to pay e-tolls under duress, and who remain ‘indebted’ to Sanral, the case could very well revolve around the validity of the agreement.

“We are aware of many motorists who signed up for the scheme out of fear of being prosecuted, not knowing that significant and valid questions surround the lawfulness of the scheme’s introduction, or that Sanral had not ensured their equipment was certified in accordance with the Legal Metrology Act, or that the Department of Transport would change their minds and not pursue their incessant threats of criminal charges against e-toll defaulters, seven months after the scheme was launched.”

According to Outa, the public discontent with the e-toll scheme and Sanral’s threatening approach towards their justified defiance becomes more widespread every day.

“It is unfortunate that despite the continued low compliance levels, government persists in trying to force its failed scheme onto an unwilling public, whose resistance has remained strong throughout the debacle. The showdown between the state and the people on the e-toll matter will continue to intensify until Sanral and their bosses eventually realise the public will not bow down to their pressure.”

Source: www.itweb.co.za

Sanral steps up chase for debtors

The South African National Roads Agency (Sanral) is making an all-out effort to collect as much outstanding e-toll debt as possible ahead of its meeting in May with Moody’s Investors Services.

Sanral, which is responsible for the maintenance and construction of national roads, will be assessed by Moody’s over the next few months along with SA as a country, a number of other state-owned companies and government structures.

The ratings agency’s investigation kicked off earlier this month with a meeting with Finance Minister Pravin Gordhan and Treasury officials.

The agency put Sanral’s rating on review for a downgrade earlier this month, along with SA’s own rating. Moody’s had downgraded Sanral’s outlook from stable to negative in January last year, confirming this finding again in July. Key to its assessment was a concern about Sanral’s ability to collect outstanding e-toll debt. Failure to do so would cut the road agency’s cash flows and raise its debt, which was already at R47-billion at the end of March last year.

In November, outstanding e-toll debt amounted to R5,9-billion and this has probably climbed since then.

Sanral spokesman Vusi Mona says on Monday credit ratings agencies and investors were concerned about a culture of non-payment of e-toll fees.

Sanral had to demonstrate its commitment to collect outstanding debt. Moody’s had clearly stated that Sanral’s rating could be downgraded because of its “inability to effectively enforce e-toll payments, leading to deteriorating cash flows and increased borrowing needs”.

“Although everyone – including those opposed to the system and nonpayers – has expressed concern about the impact of a downgrade of the sovereign and individual credit ratings, they fail to see the direct role their actions have on ratings,” Mona explains.

To tackle this, the agency announced last week that it would begin issuing civil summonses against persistent defaulters and on Monday issued a statement warning of the expiry of the 60% discount period at the end of next month.

Mona says that current payments of e-toll fees by Gauteng motorists of R80-million to R90-million a month were below projections, although still higher than the R60-million in the August to September period.

The discount on historic e-toll debt would expire at the end of next month.

The once-off discount applies to all unpaid e-tolls levied on the inner-Gauteng highways from the implementation of the e-toll system between December 2013 and 31 August 2015.

Mona warned that the discount would not be extended and urged motorists to pay sooner rather than later as there might be a rush at the end of next month, which could see some of those willing to pay lose out on the offer.

He says that the response to the discount offer had so far been encouraging, but it would be possible to gauge its success only at the end as many motorists were waiting until the last minute to take up the offer. He says some payments would come in after the deadline because of the payment arrangements some motorists were entering into in order to clear their records.

Mona says fewer than 20% of defaulting road users contacted for collection flatly refused to pay.

Some people and businesses have indicated that they are delaying payment for as long as possible for them to “earn” interest on the money.

By Lisa Ensor for www.bdlive.co.za

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