E-tolls could do irreparable harm to SA, hears court

A ruling is expected by the end of Thursday on whether an urgent interdict will be granted to OUTA and other applicants in the e-tolling court case in the North Gauteng High Court.

Early Thursday morning advocate Alistair Franklin continued with the applicants arguments for the interdict.

He put it to the court that the respondents, including Sanral and the minister of Treasury, did not provide satisfactory answers to the excessive collection costs point and also to the fact that it is an irrational and unreasonable decision to e-toll seeing as it would be practically impossible to manage with a non-compliance rate of only 7%.

He reiterated that as there is no viable alternative (be it public transport or alternative routes) to using the e-tolled freeways, the system will “hold the public captive”.

Franklin also argued that there would be irreparable harm caused to South Africans if an interdict is not granted and they have to pay tolls until the system comes before a review court in about two or three months time.

Franklin quoted from an affidavit where a South African, as part of OUTA’s documents, highlight that the R550 cap per month for driving on the roads, would make out almost 16% of her monthly income and that it would cause “substantial financial harm”.

He further argued that Sanral and Treasury’s argument that they will suffer harm if tolling does not go ahead, whether through possible default or a lower credit rating, does not logically follow as the granting of an interdict will only cause the delay of income collected, not a loss of income collected.

He also argued that there won’t be this promised “calamitous consequences for Sanral” as government is the guarantor for about R19bn of the debt of which R17bn is for a local investor, the PIC.

After he rested his case, advocate David Unterhalter SC for Sanral, started arguing that the “systemic risk of possible default by Sanral” would be massive and that the country will suffer the consequences for years.

He said that the rehabilitation after such an event will take years and that “anyone who lives in Greece at this moment” will bear testimony to this.

“It is like asking a shopkeeper to shut its doors for a couple of months in the hope that somehow his creditors will be satisfied in the meantime,” he argued.

Unterhalter said that Sanral’s legal team will systematically address the applicant’s main four points – that the collection is too expensive, that it would be “practically impossible” to manage the system with the expected amount of defaulters, that the process prior to the decision in 2008 was defective and that there is no viable alternative via public transport or alternative routes.

He said that when you have to decide whether a decision was a rational one, you have to use the information that was before the decision-maker at that time to judge.

Unterhalter said the decision was made in 2008, but the applicants were using a “primitive extrapolation” from a steering committee report in 2011 to come to their estimated R20bn for the collection of tolls.

He said that the information that was available to the decision-makers included numbers such as R200m annually for maintenance and operation compared to total capital costs of between R6.3bn and R25bn. This according to a Joint Working Group report in 2006. This report also estimated the cost to drivers of about 30c per kilometre.

The court adjourned for tea. When it reconvenes Unterhalter will continue with Sanral’s arguments.

Source: MoneyWeb