Carefully read your e-tag T’s & C’s urges SAVRALA

As a national body representing almost 450 000 vehicles on South African roads, SAVRALA (The Southern African Vehicle Rental and Leasing Association), as well as the Southern Africa Tourism Services Association (SATSA), the Coach Owners Association South Africa (COASA) and the Federated Hospitality Association of Southern Africa (FEDHASA) who all fall under the umbrella association of the Tourism Business Council South Africa (TBCSA), remain concerned and are unconvinced about the billing procedures of ORT (Open Road Tolling) and its implications despite the recent launch of SANRAL’s etag campaign.

While SAVRALA has as yet been unsuccessful in scheduling follow-up meetings with SANRAL (South African National Road Agency Limited) this month to review their many outstanding issues, SAVRALA are encouraging both individuals and companies to carefully consider the following before registering for an e-tag:

1)      The final schedule of toll tariff’s and discounts from both SANRAL and the Department of Transport have yet to be published in the Government Gazette despite various communications on the Cabinet’s tariff decisions.

2)      Despite ongoing requests for clarity and more detail, it remains unknown how SANRAL intends to prosecute road users who do not pay toll fees. It seems impractical and would most likely overburden the already strained judicial system if each individual who did not pay their fees, were to be prosecuted.

3)      Currently no documented processes or systems are in place to resolve incorrect toll transactions caused by false (cloned) vehicle license plates. This puts the responsibility and the added cost onto Individuals and companies to ensure they have the necessary resources available to reconcile their SANRAL toll bills against their own vehicle/fleet movements.

4)      The current e-tag Terms and Conditions available on the SANRAL website could be considered onerous and clearly place the responsibility of ensuring accounts have sufficient funds available on the registered e-tag user, as clause 22 requires a registered e-tag user to pay all fees and charges, irrespective of any dispute they may have over charges. This means the clause must be interpreted in the context of the risk of illegally cloned license plates as GFIP (Gauteng Freeway Improvement Plan) road users (as per clause 5) will be liable for all toll transactions recorded according to the user’s VLN (Motor Vehicle License Plate Number) or its e-tag.

5)      No details have been made available yet to explain the criteria for exemption of commuter buses and mini-bus taxis. Depending on the definition of the criteria, many tourism related transport services may also be exempt. To date no explanation exists on how SANRAL will accurately maintain and enforce the validity of the various permits and routes etc.

The decision by SANRAL (who take their instructions from the Department of Transport) to launch their e-tag campaign now, whilst several further consultative processes are underway and which are largely led by the Department, only serves to cause further confusion amongst the general public.

SAVRALA looks forward to actively participating in the (yet to be confirmed) Road Funding Summit and will continue to propose that the burden of funding both the GFIP and other national road infrastructural priorities should come from an additional amount added to the national fuel levy as this is the most cost efficient and effective method to raise the required funds.

The need to build a viable and safe public transport infrastructure, as a real alternative to travelling on the roads, must also be considered. The Road Funding Summit should seriously consider how best to use the infrastructure already purchased, if other funding models like the fuel levy are to be implemented.

Editorial contacts:
Paul Pauwen

SAVRALA continues to say ‘No’ to GFIP tolling

Release date: 27-10-11

At the Southern African Rental and Leasing Association’s (SAVRALA) AGM held today in Johannesburg, its members, representing over 450,000 vehicles, agreed not to register their vehicles for e-tags until their tolling concerns have been addressed. The lack of clarity regarding the enforcement of tolling, the burden of additional administrative costs on Gauteng road users and the risk posed to road users by cloned registration plates are only some of the outstanding concerns which present yet undetermined consequences to both its members and all Gauteng road users.

SAVRALA welcomes the recent instruction by the Minister of Transport to ‘halt all processes related to the tolling of national roads’. The Minister’s view that the ‘consultative processes should be allowed to take place to offer concerned parties an opportunity to share their views on the toll road program’ is warmly supported and long overdue. The intent, however, to implement tolling in Gauteng, should also be halted.

In addition, the firm statement given this week by the Finance Minister Pravin Gordhan to his Government to ‘use the resources we have far more effectively’, strongly resonates with SAVRALA’s concerns about the planned implementation of urban tolling in Gauteng. The expected administrative costs, conservatively running into billions, could be replaced almost overnight by an additional fuel levy without any wasteful administrative costs. Funds raised by the fuel levy could be allocated to key national infrastructural projects, such as the Gauteng Freeway Improvement Project (GFIP).

SAVRALA remains ready at all times to engage with SANRAL and the Department of Transport to address the current road infrastructure funding challenges. The lack of an effective consultation structure between the various transport related stakeholders and Government remains an important opportunity to be fulfilled.

Given the dynamic and fluid nature of the current tolling national debate, SAVRALA’s members will again review their position on the implementation of planned urban tolling in Gauteng within the next month.

Editorial contacts:
Paul Pauwen

Government clearly depsperate to implement at any cost

SAVRALA has often applauded the Gauteng Freeway Improvement Project (GFIP) upgrades and is not unwilling to pay its respective share, but is yet to be convinced that the current urban toll model is the most efficient and cost effective.

An independent transport regulator should have been in place at the beginning of this process to ensure that there is reasonable oversight and due administrative process.  In its absence, the fact that, in Gauteng we will be expected to pay R6,2bn to collect approximately R20bn, a collection cost of 30% over five years without any real transparency of the real costs involved is reason alone for grave concern.

Today’s announcement also does little to convince Gauteng road users that Government has displayed a genuine willingness to engage constructively and transparently with key stakeholders and the public at large. During the ORT Steering Committee process, established earlier this year to address the concerns of various broad based stakeholders, the Department of Transport held a press conference an hour before the final consultation meeting took place to announce their recommendations. One wonders what the point of the consultation was.  Last month we also noted the formal request, by Business Unity South Africa directly to the Minister of Transport and the SANRAL CEO, for access to key information, which to date remains outstanding.

The GFIP tolling debate created the perfect opportunity to discuss, as broad based social partners, various funding options to tackle the road infrastructure backlog in the context of developing a reliable, safe and cost effective public transport system.  The Governments desperate bid to steamroll the GFIP urban toll process has demonstrated an ability to decree a ‘user-pay’ methodology for all one day but, conveniently, when faced with threats of non-compliance from the taxi industry, decides to exempt ‘qualifying commuter taxis and buses’. Today’s announcement is notably thin on the rationale for the exclusion which in effect implies that potential toll users must, in addition to normal taxes and levies, now also subsidise public transport.

While Government may view today’s announcement as a further step towards the planned ORT implementation, we remain hopeful that there still remains opportunity for broad based stakeholders to engage with Government to identify a more holistic road maintenance strategy with a fresh but robust discussion on the use of the fuel levy funding mechanism leading to a better funding model with national support from all concerned and affected.



e-toll engagement process an exercise in smoke and mirrors


According to SAVRALA, the Gauteng Freeway Improvement Project e-toll engagement process was an exercise in smoke and mirrors

The motoring industry and in particular the Southern African Vehicle Rental and Leasing Association (SAVRALA) and its members have been waiting with bated breath for yesterday’s engagement meeting with the Director General of Transport. Sadly, the announcement by Mr George Mahlalela on 30th June of the recommended reduced toll fees and other measures was hugely disappointing.

Linda Kotze, President of SAVRALA, said that none of the real issues were addressed and that some of the more detailed and crucial concerns about both the administrative cost of the tolling system (estimated at R6,2billion over 5 years) and the real risk posed to the proposed income model through the lack of compliance by road users of the Gauteng Freeway Improvement Project (GFIP) remain unanswered.  Kotze went on to say that neither the draft Steering Committee report published last week, nor the toll project reviews conducted by two leading accounting firms addressed the funding model risks presented if drivers did not actually pay their toll fees.

Kotze further commented that SAVRALA’s questions around the impact of an estimated traffic fine collection rate of 20%, as a proxy for e-toll compliance, may have a significant impact on the income model. These concerns remain unanswered and are of grave concern should the tolling model be implemented.

The announcement by the Director General of an independent regulator to oversee, for example, tolling fares and the setting up of a formal structure for stakeholders to more directly and regularly engage with the Department of Transport, is welcome and a positive development.

SAVRALA has always welcomed the much overdue GFIP improvements and is willing to pay for these but remains unmoved by the arguments given to date by the ORT Steering Committee and National Treasury – which disregard the merits of the fuel levy as a collection method for road improvements.

The ORT Steering Committee Draft Report (page 26) makes reference to and discounts ring fencing, on the basis that it is not National Treasury policy and ‘brings about inefficiencies in government spending  over time as the lack of transparency means that agencies lose the accountability of the budget process for how effectively they apply the funds’.  As far as SAVRALA is concerned, these reasons would appear to be selective in application as the National Treasury already annually funds various Provincial, National and Local authorities with billions of Rands for road upgrades and maintenance. SAVRALA feels that the road users and SAVRALA members are entitled to an adequate and transparent explanation of why ring fencing works for the RAF (Road Accident Fund) and, more recently, the fuel pipeline.

In addition, the ‘user-pay’ methodology is being selectively applied to the high volume commuter routes as an ‘urban toll’ in Gauteng and not as a consistent methodology across all road infrastructure projects.

In their draft report, the ORT Steering Committee has also ‘recognised the need for a holistic approach to the GFIP and therefore the public transport transformation work stream will continue as a longer term work stream to assist in the identified interventions’. SAVRALA openly welcomes the focus on an integrated public transport plan, but would like these solutions in place thereby offering commuters a truly safe and reliable alternative to their private vehicles before urban tolling is again considered.

SAVRALA remains concerned that many of the tolling implementation risks and concerns have not been adequately addressed by the ORT Steering Committee. SAVRALA remains committed to working with the Department of Transport and any stakeholder or road user to ensure that an efficient, effective and fair road funding methodology is developed.