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Commuters Join Unions in Protest as Johannesburg Tolls Start

Sipho Mhlongo is angry. The 52-year-old has to drive 30 minutes from his home in Midrand to his workplace in Johannesburg, and a new toll could add about 15 rand ($1.46) a day to the cost of the journey.

“It’s unfair to us” as road users also pay taxes, the father of five, who works for Absa Bank in the northern suburb of Sandton, said in a Nov. 29 interview. “Now, I must think twice if I want to see my brother who stays in Soweto,” a township almost 60 kilometers (37 miles) away on the other side of the city.

The electronic-tolling system, or e-tolls, in South Africa’s most populous province of Gauteng went live today after more than two years of delays, costing car drivers that don’t buy an electronic tag as much as 0.58 rand a kilometer. The project has been introduced amid opposition from road users and labor unions. About one million cars use the Gauteng e-toll roads every day, according to Vusi Mona, a spokesman for the South African National Roads Agency SOC Ltd., or Sanral, which is responsible for the levies.

The highways were upgraded to ease transport constraints in the build-up to the 2010 FIFA Soccer World Cup, which was hosted by South Africa. The roads aren’t new routes so their base structure has already been paid for with taxes, according to the Opposition to Urban Tolling Alliance, which represents groups including drivers. A lack of alternative routes to travel the about 50 kilometers from Johannesburg to Pretoria, the capital, has also angered opposition groups.

’Completely Unworkable’

Talk radio stations including SAfm today reported lighter than usual traffic on the city’s highways with untolled side routes heavily congested. An aircraft towing an anti e-tolls banner flew above Johannesburg as part of a protest by main opposition party the Democratic Alliance, the South African Press Association reported today.

“We are convinced that the whole project is going to collapse,” Patrick Craven, spokesman for the Congress of South African Trade Unions, the country’s biggest labor group, said in a phone interview Nov. 29. “It is completely unworkable particularly given its unpopularity. The opposition is such a huge proportion of motorists in Gauteng.”

OUTA is appealing to motorists not to buy e-tags -- the technology that enables the payment of the tolls -- because there is no law that requires road users to register, SAPA reported.

Outstanding Debt

Sanral has built up outstanding debt, including bank loans, of 30.6 billion rand while waiting for the system to start after consumer groups challenged its introduction up to the country’s highest court. About 1.3 billion rand of bonds mature on April 30, according to data compiled by Bloomberg. The agency needs 270 million rand a month to repay its debt, SAPA said yesterday, citing Jeremy Gauntlett, legal counsel for Transport Minister Dipuo Peters.

“The principle of user pay in terms of infrastructure must not be compromised,” Public Enterprises Minister Malusi Gigaba said in a Nov. 28 interview. “The cost of refurbishing dilapidated, abandoned infrastructure is much more expensive than the cost of actually maintaining it on an ongoing basis. That’s where I think the principle of user pay must come in.”

Sanral isn’t the only company banking on the e-toll roll-out. Kapsch TrafficCom AG (KTCG), the Austrian maker of toll-road systems that will operate the Gauteng e-tolls, said in June that the project will boost its revenue by more than 50 million euros ($68 million) a year once it starts.

Struck Off

Kapsch first-half sales gained 16 percent to 235.9 million euros, the Vienna-based company said Nov. 27. In the fiscal year through March it posted three straight quarterly losses partly caused by delays to the South African e-toll project. The company’s shares gained 6.4 percent on Sept. 26, the day South African President Jacob Zuma signed the bill into law, and has gained 17 percent since that date.

Sanral is confident the majority of Gauteng road users will pay the e-toll, Mona said in an e-mailed response to questions on Nov. 29. Judge Maria Jansen of the High Court in Pretoria struck off a last-minute filing by the Freedom Front Plus political party to stop the implementation of the e-tolls, SAPA reported yesterday. It was scrapped as the applicant failed to make a proper case, the news agency cited Jansen as saying.

“It’s something not good for us at the moment,” said Jonathan Cloete, 37, who lives in Roodeport, west of Johannesburg, and works in security services. He will not be buying e-tags. “I’m going to challenge them and see what they come up with,” he said.

To contact the reporter on this story: Kamlesh Bhuckory in Johannesburg at kbhuckory@bloomberg.net

To contact the editor responsible for this story: Simon Thiel at sthiel1@bloomberg.net

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