E-toll delay risks SANRAL default

Sanral’s counsel has spent the time before lunch in the North Gauteng High Court attacking the four basic pillars upon which the applicants in the e-tolling case built their argument for a prima facie case. Legal counsel said that the costs of postponing the tolling of the roads again, will have significant financial repercussions for the roads agency.

These four grounds are:

1. The cost of collection of the e-tolls are disproportionate and thus the decision made to use this funding model was irrational.
2. The system will be practically impossible to manage with a default rate of around 7%, again indicating an irrational decision in picking e-tolling.
3. During the process of making the decision in 2008, the applicants argue that the notice to declare the roads as toll roads should’ve presented some indication of the costs of the tolls. This is evident in the public outcry following the publication of tariffs in 2011 compared to the just more than 80 submissions made by the public in 2008.
4. That there is no viable alternative to the use of the toll roads, whether by using public transport or alternative routes.

David Unterhalter argued with regard to the first point that when deciding whether a decision is rational or not, you have to use the information that was available to the decision-maker at the time. The decision was made in 2008, thus figures available then should be used to determine if the costs of collection of tolls are disproportionate.

He argued that they are indeed not, as figures from a 2006 report showed that the costs at that time was estimated at only R200m per year compared to capital expenditure costs of more than R6bn for the roads. He said the applicants cannot use information that came to the fore after the decision was made to prove that the decision was irrational.

Arguing the point about the management of the system in lieu of defaulters, he said that default is a “fact of life”, but that Sanral will manage those issues responsibly.

He told the court that you can’t withhold a service just because some people will default on their payments.

He also stated that Sanral has sanctions available to it, under the Sanral Act, to apply to secure the appropriate level of compliance – such as summonses and notices.

Unterhalter said that according to the law there is no mention made that it is a legal requirement to include the expected costs in the original notice when it was decided to declare the roads as toll roads, thus that point holds no grounds.

Finally, on the public transport system and alternative routes, he argued that it was never a pre-condition for the implementation of e-tolling, but that the aim was to promote public transport alternatives as part of an ongoing process as people start to seek alternatives to the use of the tolled freeways.

Just before lunch Unterhalter explained to the court that the harm that will be done to his client, Sanral, if tolling is once again postponed with an interdict until the applicants can bring their case for review to the courts in a couple of months, will be substantial.

“My client has been waiting more than a year to start accruing income,” he said. He said Sanral only has liabilities and no income on its books and needs to “balance” these books.

He said Sanral will lose a “massive amount monthly” of more than R210m and that it has a contract with the toll collector as well as interest on debt incurred to service.

“The time has come where no-one can tolerate the situation anymore,” he said and indicated that the possibility is very real that Sanral could default.

“To simply say government (the guarantor) will pay is not a responsible answer (by the applicants),” he told the court.

The court reconvened after lunch.

Source: MoneyWeb

Related articles

E-tolling is completely rational says Sanral

E-tolling: unreasonable, only viable option

E-toll interdict application urgent says judge