Submission to the Premier’s Advisory Panel on E-tolls Dear Sirs and Madams The Democratic Alliance has made several prior submissions to various bodies in the run up to the introduction of e-tolls on the highways of Gauteng. We also debated the issue in the Gauteng Provincial Legislature. Our input can be summarised as follows: 1. There was (and still is) an inadequacy of reliable, safe, affordable, accessible and punctual public transport in Gauteng. 2. The inequality of the ‘equitable’ grants provided to provinces by National government and chronic underfunding of Gauteng (and its roads) has led to severe gridlock on the highways in Gauteng. 3. The strange decision to toll almost all of Gauteng’s existing highways and the lack of transparent interrogation of the effect this would have on the Gauteng economy causes concern. 4. The lack of transparent research relating to toll affordability and the road user’s ability to pay - especially given other synchronous, huge financial demands on consumers e.g. electricity, water is concerning. The poor bear the brunt of increased transport costs. 5. The knock-on effect of e-tolls on inflation has not been determined. 6. The effect and cost that e-toll avoidance would have on the deterioration of other (provincial and municipal) roads - especially bearing in mind the unusually high permitted heavy vehicle axle load and the flouting of these limits by overloading and the inadequacy of Road Traffic Rule enforcement - has not been considered. 7. The chaotic state of data in the eNatis system and its effect, plus the high number of cloned number-plates would have on e-toll billing is unclear. 8. The lack of meaningful consultation relating to the freeway enhancement project plus the lack of transparency in the finances and financing relating to the proposed tolls needs clarification. 9. The cost of collection of e-tolls is disproportionately high. It is also cumbersome and will flood the courts with petty offenders. 10. VAT on e-tolls is nothing but double taxation and should be removed.

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11.The DA is concerned that motorists are used as ‘cash cows’ to fund a myriad of government projects which do not relate to transport, and we reject multiple layers of taxes for the same service e.g. tolls, fuel levies, licensing taxes, VAT on tolls. The DA suggests: a. All research that has been carried out should be made public, and where this is deficient further research should be undertaken b. In the interests of true transparency and in the interests of having an informed public, the full financial implications of the project should be made available, including profits for all involved parties and government. c. That the proposed Gauteng Freeway Improvement Project (GFIP) be funded by a small increase in the fuel levy. The fuel levy must revert to being ring-fenced for transport - especially for roads and their maintenance. d. Any existing unalterable contract arrangement should be reduced to a ‘buy-out’ sum, and funded by the National Department of Transport or National Treasury. e. VAT exemption must apply to e-toll fees. VAT on a toll equates to double taxation. f. Public transporter operators and emergency vehicles must be exempt from paying e- toll fees. g. The Department of Transport – both National and Provincial - and the relevant Metros must increase their investments in public transport over and above the Gautrain and Rea Vaya (i.e. Buses and Metrorail). Our observations of what has happened in review are:  Concerns 1. Inadequate reliable, safe, affordable, accessible and punctual public transport in Gauteng. The Gautrain runs at maximum capacity during peak periods and can carry no more commuters. Certain areas of the GFIP are once again gridlocked at rush-hour. 2. The Gauteng economy contributes far beyond its size and population to the national economy. Stifling this economy stifles the nation’s growth. Gauteng in effect subsidises other provinces with taxes. In any event etolls (or other tolls) are planned for other areas in the country. Page 2 of 4

3. There is still no certainty of who benefits and by how much from the current fiasco. Attempts by Sanral to avoid disclosure of similar plans in the Western Cape indicate the agency has something to hide. 4. Consumers are hit by large increases on rates, services, water and power which lead them to reject these e-tolls. Government profligacy and waste is noted by the public and the e-tolls is a way to oppose this wastage. 5. Inflation has moved above 6% . Some of this increase is due to e-tolls. 6. E-toll avoidance has led to provincial and municipal road deterioration. 7. The chaotic state of data in the eNatis system has led to massive cloning of number-plates as predicted. E-toll billing is ineffective because eNatis data is corrupt. 8. The cost of collection of these e-tolls is disproportionately high. Sanral has tried to avoid some costs by using unmonitored mail with disastrous results. The percentages and amounts of offshore removal of profits have not been made public. 9. VAT remains. Multiple layers of taxation of motorists remain. 10.Environmental issues that concern our voters are light pollution from gantries and increased production of green-house gasses by motorists using secondary routes to avoid e-tolls. These avoiders also cause noise pollution.  Suggestions a. Only point ’f ‘ of our suggestions has been adopted. Due to pressure from the taxi industry exemption was promised to this group as well. However the implementation of this exemption has been problematic because persons within the taxi industry do not want to register for e-tags or with SARS. b. The cost of attempted recoveries is extremely high. This initially resulted in statements being sent by unrecorded snail mail which arrived too late to claim discounts which were rightfully due to motorists. Later hybrid mail was used but this also was too slow. This resulted in the Minister of Transport declaring that instead of the 7 days demanded by SANRAL that motorists would have 51 days in which to claim discount (although no gazetting of this Page 3 of 4

decision is noted). Whether the Post Office can actually cope with this increased flow of mail remains to be seen. The cost of a billion Rand per year in collecting e-tolls could be saved by using a ringfenced national fuel levy. This would assure 100% compliance. Those who state that others should not pay for Gauteng e-tolls must be reminded that Gauteng taxpayers subsidise other provinces continuously. c. Less than 40% of the estimated 2.5 million regular users of the highways are registered. This means that only certain users pay which is patently unfair. d. Policing of the system is impossible. Clever individuals buy an etag and then remove it and claim their number plate is cloned. If it is impossible to manage a new system MUST be devised. e. The taxi farce is unmanageable. Conclusion The existing system simply isn’t working and never will work. The associated costs are exorbitant and unnecessary. The only way it can work is with a dedicated (ring-fenced) fuel levy at a national level.

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