Victory for City and Capetonians as Supreme Court of Appeal thwarts tolling of N1 and N2

22 September 2016 

The Supreme Court of Appeal in Bloemfontein this morning, 22 September 2016, ruled in favour of the City of Cape Town when the judges dismissed SANRAL’s umpteenth attempt to toll sections of the N1 and N2 freeways in Cape Town. This victory hopefully marks the end of the City’s four-and-a-half-year legal battle to shield its residents against the socio-economic impact of SANRAL-sanctioned toll roads.  

‘The City of Cape Town has won every round in court since we launched our review application on 28 March 2012 to set aside the approvals that enabled the South African National Roads Agency Limited (SANRAL) to toll sections of the N1 and N2 freeways in Cape Town.

‘Following on from the Supreme Court of Appeal’s (SCA) ruling this morning, I hope that SANRAL will refrain from wasting taxpayer’s money on further legal action. The City’s estimated legal costs have already reached at least R20 million.

‘SANRAL should finally concede that they followed an improper and unlawful process which, if it was left unopposed, would have resulted in Western Cape road users paying R62 billion in toll fees over a period of 30 years.

‘As such, the outcome of this court case is a resounding victory for the residents of Cape Town and the Western Cape province as a whole,’ said the City’s Executive Mayor, Patricia de Lille.

‘The SCA ruling is of great public importance as it protects the public against an unlawful commitment to a massive construction project involving billions of rands, which would impact significantly and adversely on the public purse and on the socio-economic environment of the Cape Town region for at least three decades.

‘A full bench of the SCA upheld the judgment in the Winelands tolling matter that was handed down by Justices Ashley Binns-Ward and Nolwazi Boqwana of the Western Cape High Court on 30 September 2015.

‘The SCA declared the 2014 decision of the SANRAL Board to declare certain sections of the N1 and N2 as toll roads to be invalid and it was reviewed and set aside. In addition, the SCA dismissed SANRAL’s appeal with costs.

‘The City has successfully argued in court that the Minister of Transport and SANRAL both failed to consider relevant information – such as the impacts of tolling, the affordability of the proposed toll fees for low-income earners, traffic diversion rates and the impact on the surrounding road networks, the financial viability and sustainability of the tolling project, and other less expensive funding options for the refurbishment of the N1 and N2 freeways.

‘Importantly, no consideration was given to the negative macro-economic impact on the region and province’s economy, in particular to those sectors that rely on freight services such as the agricultural sector. Furthermore, the economic landscape in which the declaration to toll was taken has changed, in particular the downswing in the local economy.

‘SANRAL withheld material information on which the declaration of the toll roads was based, such as the proposed toll fees, the estimated costs of the project, and guarantees which SANRAL intends to give the concessionaire. The so-called “confidential information” became available only as a consequence of the City obtaining a court order compelling disclosure. In fact, SANRAL has dragged out this litigation by refusing to provide documents to which the City was found to be entitled. The litigation has exposed SANRAL’s secretive nature and its resistance to accountability,’ said the City’s Mayoral Committee Member: Transport for Cape Town, Councillor Brett Herron.

‘SANRAL’s foiled attempts to toll sections of the N1 and N2 freeways would have had far reaching socio-economic consequences for the public and future generations:

- Local residents and visitors to this region would have paid toll tariffs that are nearly three times that of the e-toll tariffs charged on the Gauteng Freeway Improvement Project (GFIP) toll roads. This is despite government admitting that the GFIP fees are unaffordable

- For every R2 paid in tolls, only R1 would have been to the benefit of the toll-payer

- The proposed toll scheme would involve 243% of the costs of a public non-toll scheme, with the largest component of the additional cost to be the preferred bidder’s pre-tax profits

- Traffic would have been diverted away from the freeways, in particular around the toll plazas – upgrading alternative routes would have cost the City between R258 million and R516 million alone, excluding the required new major interchanges and the widening of bridges

‘The City insists that it will be cheaper and more cost effective for SANRAL to fund the upgrades and maintenance of the N1 and N2 freeways themselves, as opposed to implementing a private tolling scheme. Tolling is an excessively expensive funding method for the construction of road infrastructure and the user-benefits are usually miniscule in comparison with the concessionaires’ profits,’ said Mayor De Lille.

‘The SCA ruling is the high point in a long legal battle.

‘We have brought this review application in the interest of the residents of Cape Town, and in particular the poor, who would have been the worst affected if SANRAL’s decisions were to stand. Given the scale of this litigation and SANRAL’s stubbornness, no individual or group of residents could realistically have brought this legal challenge,’ said Councillor Herron.

‘Going forward, I once again call on SANRAL to rather work with the City to find a solution for the infrastructural upgrades that may be required for the N1 and N2 freeways,’ said Mayor De Lille.

Issued by Councillor Brett Herron, Mayoral Committee Member: Transport for Cape Town, 22 September 2016