Tag Archive | fuel levy

E-tolling: OUTA takes it to Parliament

Committee unsympathetic to OUTA…

sent to clients 20 February…. Tough words were used in Parliament when the Opposition to Urban Tolling Alliance (OUTA, now called Organisation Uniting against Tax Abuse) presented its views on e-tolling twayne duvenageo the Parliamentary Portfolio Committee on Transport, particularly of the idea to fund SANRAL of of the fuel levy.  In the end Wayne Duvenage, OUTA Chairperson, was told by the Committee that the only way forward was that OUTA and the SA National Road Agency (SANRAL) get together and negotiate a compromise.

The view of ANC members was perhaps more clearly demonstrated by one MP who stated that the user-pays system had to be retained, since the poor could not afford the costs of freeway development being absorbed into the fuel levy, as was proposed by OUTA.

She explained quite simply that if you could afford a car licence and petrol in the first place, one must pay for e-tolls, otherwise the e-tolling would be added to the price of sugar and soap through the fuel levy because of distribution costs. At the time, members were not aware of the forthcoming fuel levy increase in the Budget.

No either, or…

Whilst ANC members agreed with OUTA that the Gauteng e-toll scheme as currently imposed had not been a great success, it was considered unlikely that Parliament would even consider halting the programme as such and would not encourage a switch to levy funding. A way of making e-tolling a success had to be found, they said.

The main platform of OUTA’s complaints was the issue of poor public engagement and an “arrogant imposition” of the programme which had been badly thought out, they said.    Wayne Duvenage claimed that the argument that an increase in road levies would hurt the poor was hypocritical since government has themselves had increased the fuel levy by 92% over 8 years.

Free ride

OUTA held that e-tolls amounted to extortion and the fact that none of the 46,000 exempt Gauteng taxis had fitted e-tags suggested that the scheme was being shunned, even when free.

nazir alliThey reminded MPs that the High Court had set aside the interdict granted to SANRAL that further discussions had to take place before e-tolling commenced on the basis that SANRAL could start but a door had to be left open for a collateral challenge from society. This was now the case.

OUTA complained also that and that there were no adequate alternatives to easing congestion as required and that the Competition Commission had found the relevant construction companies guilty of collusion.     Yet earlier, SANRAL had claimed that there was nothing untoward about construction costs before the Commission’s findings. MPs said they wanted to know more about this and there would be a follow up by Parliament.

Compliant motorists double penalised

Currently, Duvenage said, compliance stood at about 9%, which was vastly unfair to those paying. (This meeting took place before it was discovered that in all likelihood the remaining 91% had the slate of outstanding fines wiped clean).

Duvenage warned that coupling licence renewals with e-tolling compliance “was an invitation for public resistance” e-toll gantryand not encouraged by OUTA since it would destroy the basis of the AARTO Act and the foundation of road governance.

OUTA called for the e-toll principle be halted in practice overall and that an “exit strategy” be planned for existing contracts.      OUTA was reminded by Chairperson Ramakatla that the Commission of Enquiry into e-tolling had not advised that the user-pay principle be discarded. The response from OUTA to the chair that it was not the right tax mechanism to be used and was also unfair. Users were already paying for road use through fuel levies and taxes.

Talking only route

M de Freitas (DA) said it seemed at the time likely that Gauteng as a Province would oppose e-tolling and to head off the licence fees confrontation, OUTA and SANRAL had to appear at the same meeting and talk of compromise to avoid this happening. Such a confrontation would be disastrous for the country at a difficult time.

OUTA defended themselves by saying that they did not support anarchy and had not stated ever that they were in agreement with e-tolling, their argument being that it was not the right mechanism at all, so it would difficult to find a compromise on e-tolling as a programme.

OUTA said the system used was not a “boom down” system but a straight drive through and “the long-distance model had to be separated from the e-tolling model.”
Wayne Duvenage added he never went as far as Mpumalanga but the e-toll system charged him for freeway building in that part of the world. However, he said, he was already paying for un-tolled Mpumalanga roads through his normal tax, in fact any roads.

Fuel levy out of equation

Chairperson Ramakatla told OUTA that although agreement had been expressed that people had to pay for road use, the OUTA response seemed to be saying something else and their argument that there had to be sole reliance on the fuel levy was not acceptable.

If there was something wrong with the e-tolling system in their view they should make suggestions how to get it right but the fuel levy option was clearly out.

Whilst OUTA had submitted that there was a lack of consultation in 2007, and this was probably true, he said, the lack of consultation was later corrected and that argument no longer applied and this should be borne in mind if a resolution to the problem was to be found by stakeholders.

He said that Parliament would decide on its view on the e-toll issue in further debate.

Previous articles on category subject
Bumpy road for e-tolling Bill continues – ParlyReportSA
Transport Laws Bill on e-tolling amended – ParlyReport
Parliament says Transport Bill on e-tolling will go forward
Transport Laws Bill enabling e-tolling tabled – …

Posted in LinkedIn, Special Recent Posts, Transport0 Comments

Sovereign rating time after budget and SONA

SONA and Budget 2013/4 beat the pundits…   

zuma2With budget behind us, the script for the state of nation address (SONA) becomes a little clearer.

At the time SONA wasn’t what was expected and represented to many a total let down insofar as direction, information and inspiration was concerned.   President Zuma’s speech was really quite remarkable for the subjects it didn’t touch upon or skirted around.   Perhaps that’s what happens when a majority party is half way through its current tenure of office.

In all fairness, however, there is so much that is about to happen in South Africa on infrastructure development and so much “in the pipeline”, that there was little the current government could do other than recycle the list of eighteen major projects that the twenty seven government departments and sixteen utilities having been talking about for months, sometimes years, all of which seem in a pretty embryonic stage. The hope is that when it all comes together, it won’t be too late.

NERSA played a trump card

On energy, little was said – in fact practically nothing at all that was not patently obvious such as the fact that Medupi and Kusile are being built. In fact nothing was said on electricity at all, the reason for which was to become evident in the NERSA decision the following week when Eskom’s multi year price determination call of 16% was toned down to 8%.

Dangerous budget

pravon gordhanAlso the following week and following SONA came Pravin Gordhan’s budget with its surprising nil increase on income tax, severe budget cuts, the introduction of carbon tax and an increased fuel levy. Once again the National Development Plan was heavily emphasised and perhaps at last government is going to get on with it with a new presidential infrastructure co-ordination commission to support the initiative.

The Budget was in some ways masterful but still frightens the credit rating agencies, with Gordhan trying to balance the books after an increased deficit over the previous year, something the new government used to pride itself on not needing under finance minister Trevor Manuel – but times change and the global recession arrived.

Executive powers

Interesting for Parliament is the introduction of the draft Infrastructure Development Bill giving extraordinarily wide powers to an all-powerful commission to be known as the presidential infrastructure co-ordination commission, as stated above, with all nine premiers, the President and Deputy President steering the ship in an effort to cut red tape and speed things up.

This can only be good, if only for the fact that the captain of the ship can speak alone to the twenty seven departments and sixteen utilities described above.

Public Service too big

Which leads to the issue of a somewhat bloated public service which has had the benefit of above-inflation increases this year, so it was pleasing to see that a skills audit of public servants is about to be commenced amongst the 1.2m public servants, which in a country of only 51m, is totally disproportionate.

Public Service and administration minister Lindiwe Sisulu told Parliament that the increase of 1% per year in salaries has to be turned into a decrease of 1% next year.

Encouragingly also, planning minister Trevor Manuel (who has but ten staff) has clearly indicated that he is relying on the parliamentary oversight system to beef up his programme to wake up to the National Development Plan.  How well Parliament scrutinizes the national budget in the coming weeks in every parliamentary portfolio committee demanding both value for money and delivery on time, every time, is now the critical issue.

Posted in Cabinet,Presidential, Energy, Finance, economic, Fuel,oil,renewables0 Comments


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