Capetonians should not pay toll that is unlawfully imposed

18 August 2015

The City of Cape Town has concluded its oral argument in the application to the Western Cape High Court for reviewing and setting aside SANRAL’s proposed tolling of portions of the N1 and N2 freeways this morning, 18 August 2015.

I am confident that our legal team has presented the most compelling case possible over the past week. The matter is now in the hands of the court.

No matter the outcome, it has become increasingly clear that this is not the end of the road for tolling in our city. 

SANRAL's approach to tolling needs to be reined in and it seems that our National ministers have been unwilling or unable to exert executive and political oversight over this government agency. In the incoherent legislative processes required to declare a toll road, SANRAL has taken that gap and acted in a way that is hostile to public scrutiny and accountability. This case has at the very least exposed this expediency and the need to change it urgently.

That said, the crux of our argument is as follows:

- that both the SANRAL Board and the National Minister of Transport flouted Government Policy

- that the Minister of Transport was fundamentally misinformed about the costs of the Winelands Toll Project and the sureties

- that the Minister of Transport misconstrued his executive powers and that the subsequent failure to exercise his powers has led to an illegal decision (to declare the toll roads)

- that the City and the public were denied the right to fair administrative procedure due to the lack of a proper public participation process about the Winelands Toll Project

- that apart from an affidavit by Mr Nazir Alli, Chief Executive Officer of SANRAL, there is no evidence – minutes, memorandum, agenda or resolution – confirming that the SANRAL Board took a decision to declare the highways as toll roads, as required by the SANRAL Act, prior to the publication of the Notice on 15 September 2008.

Over the past two days, the City made a compelling argument that the public participation process that SANRAL undertook in April 2008 was a sham. Those affected were not told what was happening and why. The notice to declare the highways as toll roads did not give the public any information about the purpose and the reasons.

Furthermore, the SANRAL board members did not read the comments and representations by the City of Cape Town and the public on the proposed declaration. They did not even read the (inaccurate) summary of those submissions in the report to the Minister. Thus, the process was procedurally unfair.

The City also argued that it is unclear when the public would have been afforded the opportunity to comment on the proposed toll tariffs – the base toll tariff in the draft concession contract is equivalent to 74 c/km (2013 values, excl. VAT). This is almost three times the tariff of 26 c/km (excl. VAT) of the Gauteng Freeway Improvement Project.

Once the contract has been signed with the preferred bidder – the Protea Parkways Consortium – and the sureties have been given, it would be too late for the public to say that they cannot afford the tariffs. Neither would the National Government be able to pay for the shortfall as the court has been informed that the proposed upgrades to the N1 and N2 freeways should be funded by private money due to a lack of public funds.

The City argued that this is not a case about a minor tender, but one of huge public interest. It has also come at a time of high emotions about tolling.

Should this decision stand, the people of Cape Town will, for a period of 30 years, pay a toll that has been unlawfully imposed. Furthermore, public money amounting to nearly R50 billion in 2015 values will be spent on a project that has not been lawfully authorised.

National policy stipulates that national roads may be tolled where it is financially and socially viable. We now know, after several days of oral argument in the High Court, that neither the National Minister, nor the SANRAL Board, considered the cost of the proposed Winelands Toll Project and its consequences on the social-economic environment when the decision to toll was taken.

The City has stated in court that the public will, over a 30-year concession period, pay between R44,9 billion and R48,4 billion in toll fees (2010 values excluding VAT). The National Minister of Transport, however, was told at the time that the project would cost only R7,9 billion and he was unaware of the potential reimbursement (R32,8 billion in 2010 real values, excl. VAT) for which SANRAL would be liable.

The Minister of Environmental Affairs and Tourism told the court that it was not his job to consider the costs or the impact and that it is the responsibility of the National Minister of Transport. The National Minister of Transport, however, told the court it was not within his mandate to consider these factors as the Minister should only determine whether the SANRAL Board has complied with the SANRAL Act.

We also know that SANRAL did not consider the cost of the project. As a consequence, none of the decision makers considered the financial or social viability of the proposed Winelands Toll Project. This omission is inconsistent with the White Paper on National Transport and the decision to declare the N1 and N2 freeways as toll roads is therefore inconsistent with government policy.

The City has concluded its oral argument by asking the court to set aside the approval of the National Minister of Transport, as well as the declaration that parts of the N1 and N2 freeways should be toll roads.

Judgment in this matter is reserved.

Statement issued by Councilor Brett Herron, Mayoral Committee Member: Transport for Cape Town, City of Cape Town, August 18 2015