Better than reality TV: E-tolling court drama

Next episode: tender documents and contract with ETC and Kapsch TraficCom

April 30, 2012
e-Toll logo and gantry

After as riveting a week as one could get in the courts of South Africa, South Africans will hopefully soon know the true extent of the cost of the e-tolling system.

Although the tender documents and contract was not divulged to the applicants in the case to get an interim interdict, the Opposition to Urban Tolling Alliance (OUTA) will now go to court to get a full review of the decision to use e-tolling as a funding model. In this process OUTA and the other applicants will ask for all documents pertaining to the cost of administration of the system.

Everyone is looking for these documents. In March, Cosatu asked the South African National Roads Agency (Sanral) for the documents, which was then promptly handed over with hundreds of blacked out pages, resulting in the ire of Secretary-General Zwelinzima Vavi.

Transport minister S’bu Ndebele then ordered Sanral to be transparent and hand over the uncensored documents.

Patrick Craven, spokesperson for Cosatu, told Moneyweb that the documents were indeed handed over to the trade union federation. He said that their legal team was still studying the documents.

“We’ve been asked to keep them confidential, but if there is anything in there to suggest wrongdoing we will expose this to the public. The information could also feed into the process around the full court review coming up,” he said. During the recent court proceedings Cosatu indicated to the judge that it is an observe and will decide whether or not to become involved.

There was talk that these documents could be made public, but this has yet to happen. When Moneyweb contacted Priya Pillay, communications manager for Sanral, to get access to the documents, she reiterated a statement that was released in March by the board of Sanral that it is examining the documents and would report back on the matter as soon as the process was completed.

So what has happened in the drama thus far?

We had a court case where heavyweights in the legal world battled it out in front of Judge Bill Prinsloo. We had a last minute tweet by Vavi on Thursday breaking the news that after a meeting between Cosatu and the ANC the two parties were going to ask government to postpone e-tolling for a month – this despite Sanral and Treasury arguing vehemently that a financial calamity was waiting in the wings if the collection of tolls was to be postponed again. There was a ruling on the Saturday of a long-weekend with Judge Prinsloo spending his Freedom Day perusing thousands of pages of affidavits and heads of argument to prepare his ruling. Finally there were tears of joy from Wayne Duvenhage from OUTA and a stony-faced Nazir Alli, CEO of Sanral, walking away without addressing any of the press gathered at the North Gauteng High Court (see gallery).

No less than 19 counsel formed part of the legal teams of the applicants (OUTA, the Southern African Vehicle Rental and Leasing Association – Savrala, the QuadPara Association of South Africa – QASA, and the South African National Consumer Union – Sancu) and the respective respondents who actively partook in the proceedings before the judge (Sanral – the first respondent, the minister of transport and the Gauteng MEC for roads and transport  – the second and third respondents, and the National Treasury – the seventh respondent). Ten of these were senior counsel, including notable names like Advocate Jeremy Gauntlett, Advocate David Unterhalter, Advocate Alistair Franklin, Advocate Vincent Maleka and Advocate Alfred Cockrell.

Judge Prinsloo started his ruling on Saturday by thanking these legal teams for their “well-crafted, constructive contributions”. As court cases go, it was riveting stuff. So much so that the public gallery was packed on Saturday, with one individual even bringing his children to witness the historic occasion.

The applicants argued that they had a prima facie case before the courts because the decision to use e-tolling as a funding model was an “irrational” one. They told the court that the costs of running the system were disproportionately high, that the system will be “virtually impossible” to enforce, that there were inherent procedural errors when the first notice to declare the road as a toll road was issued and that there was no proper alternative, meaning that the system would keep South Africans “captive”.

They further had to prove that the applicants would suffer irreparable harm if the system is not stopped in the interim. Here OUTA cited the plight of ordinary South Africans who would not be able to pay the toll, struggling with rising costs of living already.

Thirdly they had to prove that the balance of convenience was in their favour (that they would suffer more than the respondents if the interim interdict was not granted).

Prinsloo ruled on Saturday that the applicants made a proper case for each of these hurdles and granted the interdict.

From the respondent’s side a lot was made of the potential financial calamity that Sanral and the government would face if tolling is postponed once again.

The legal counsel for Treasury made a number of references to the debt-embattled nation of Greece while Sanral pointed out that it would be losing R225m per month in revenue. This could lead, the legal teams argued, to a possible default on the debt incurred (something that last happened for government in the dark days of 1985) and the downgrading of Sanral and the country’s credit rating.

These are not threats to be taken lightly. As judge Prinsloo stated: These were “serious considerations” which he duly reflected on.

The 11th hour fifth postponement, which came about on Thursday, proved to be an embarrassing development for the respondents. Prinsloo, in his ruling, made reference to this, saying that despite the “projection of calamities as a result of such a delay” the project has been postponed four times before the hearing started and again two days before the ruling was handed down.

One could sympathise with the respondents for not staying after the ruling to chat with the media. What were they to say? They spent days in court making out a case, only for the ruling party to basically undermine their arguments by postponing the e-tolling system again.

On the day the fifth postponement was announced, there was a clear indication that something was brewing. While advocate Alfred Cockrell SC was still replying for the applicants, Sanral’s legal team left the courtroom to caucus outside during the later afternoon hours. Around four the news hit the social media sites. Journalists basically informed the OUTA legal team of what just happened when they were asked for a response.

Now back to the documents everyone wants access to but can’t get a hold of.

The documents will hopefully shed light on the exact extent of the contract for collecting the tolls that was granted to the company Electronic Toll Collections (ETC), with the Austrian company Kapsch TrafficCom owning 56.81% of ETC and 35% held by South African-based Traffic Management Technologies (TMT).

According to its latest annual report, Kapsch also now owns a stake of 56.81% in TMT, thus effectively boosting its stake in ETC. “Kapsch also won the contract to supply a total of 1.5m on-board units for the electronic tolling system to be implemented by Kapsch in the province of Gauteng,” the report states.

According to OUTA, the tender was for just over R6.2bn, which included the costs of the construction of the gantries (approximately R1bn) and the cost of administering e-toll for five years of R5.2bn. The understanding is that after five years the tender will be re-opened.

Hopefully these documents will be made available, whether voluntarily by Sanral, or through the legal process which is due to start around June. The cost of the administration of the system remains one of the main arguments opponents are using to justify trying to block e-tolling from becoming a reality first for Gauteng, and possibly in future, for the rest of the country.

Source: Moneyweb

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