The Congress of South African Trade Unions has submitted the following notice to NEDLAC, under Section 77 of the Labour Relations Act, in connection with the Gauteng Open Road Tolling System:

COSATU Section 77 Notice on Gauteng Open Road Tolling System

May 2011

1. Background

1.1 The Congress of South Africa Trade Unions (COSATU) has been calling, and continues to call, for an integrated, safe, reliable and affordable public transport system for the country. The attainment of this requires investment in the transport infrastructure. The apartheid legacy and its spatial development in particular has left the majority of the working people and their families without good public transport system.

1.2 Unfortunately, the democratic government in the early years of our democracy opted for market solutions to the public transport problems in the country. One of the first sign in government's faith in market solutions was the establishment of the South African National Roads Agency Limited (SANRAL) within the Department of Transport. SANRAL was formed in 1998 as a company operating along commercial lines with the mandate to "maintain and develop South Africa's national road network". To achieve this mandate of maintaining and developing South Africa's national road network, SANRAL has seen privatisation as one of its key strategies.

1.3 The privatisation strategy of SANRAL entails concessioning some sections of the nation's road network to private companies and setting up toll gates on major national roads. About 1288km of the tolled sections of the national roads have been concessioned for a period of 30 years to the Bakwena Platinum Corridor Concessionaire, N3 Toll Concession and Trans African Concessionaires. These private companies own the Pretoria-Bela-Bela portion of the N1 and Pretoria-Botswana border portion of the N4; Heidelberg-Cedara portion of N3; and Gauteng-Port of Maputo portion of the N4 (the Maputo Development Corridor), respectively.

1.4 There are currently more than 50 toll gates in the country and SANRAL continues to build more and in the process making it costly for millions of South Africans, working people in particular, to travel to work and visit their relatives. To rub salt in the wound, SANRAL has turned more of the Gauteng Province's major roads into toll roads through a new, high tech system, called "Open Road Tolling".

2. Open road tolling: a modernised privatisation of the nation's roads

2.1 Instead of addressing the public transport challenges, government's company, SANRAL, has decided to introduce the Open Road Tolling System (ORTS) at a cost of R20bn. No workers will be employed to collect the tariffs as it happens with the majority of toll points currently. With this system SANRAL aims to raise funding for maintenance of highways and to force people to use less of their private cars and more of the public transport.

2.2 The ORTS is part of the Gauteng Freeway Improvement Project (GFIP). The next target province for the ORTS is said to be Kwazulu-Natal (KZN). According to SANRAL website, the GIFP was approved by cabinet in 2007. SANRAL claims that the members of the public were given the opportunity to comment on the project, particularly the proposed toll points and expected toll tariffs. Informed by public comments, the Minister of Transport declared certain road sections as toll roads, with a total of 42 toll points (gantries), which according to SANRAL, "allow for the toll fees to be contributed fairly by all those that use the road". There are no physical toll booths as overhead gantries are fitted with equipment that recognise the electronic "e-tag" in vehicle, with fees deducted from road user accounts.

2.3 According to SANRAL, the following are the benefits of tolling:

• Delivers the much needed infrastructure sooner than later
• Ensures dedicated funding for maintenance of the road
• Ensures a high quality road network and generally reduce travelling distances and result in substantial savings on the running costs of your vehicle and much valued travel time
• The user-pay principle represents a fair way of paying for transportation facilities
• Links the benefits for the road user with its fees by charging users only in direct relationship to how much of the road they use

2.4 Furthermore, SANRAL argues that the GFIP creates links with other transport modes (the Gautrain, Metrorail, and Bus Rapid Transit) "to provide citizens with the choice of using public transportation or car-pooling that will alleviate congestion caused by single-passenger vehicles".

2.5 COSATU views this as a skewed approach in addressing the challenges around the transport infrastructure. In our view, the failure to invest in a safe, reliable, integrated and affordable public transport system has resulted in massive congestion on major roads due to proliferation of minibuses, freight transport and private vehicles. In those towns where there is still rail transport, trains are unreliable, unsafe and result in workers arriving late at work, thus losing part of their pay and in many cases, their jobs.

3. Socioeconomic impact

3.1 The central objective of all government programmes is the creation of decent work. The 2009 elections manifesto of the ANC and the 2011 State of the Nation Address, among many other programmes, make this point very clear. So how is SANRAL contributing to this important national objective?

3.2 SANRAL argues that "congestion impacts on economic growth potential, loss of business opportunity, and increase road user costs". Not addressing the congestion experienced on the freeway is simply not an option. So it justifies the ORTS because "its benefits outweigh the costs and there is acceptable rate of return on investment".

3.3 SANRAL also says the Economic Impact Study had been done by the University of Cape Town and found that ORTS would result in high economic rate of return. Furthermore, at the peak of construction, about 20 000 people were employed on GFIP.

3.4 The reality is that transport is the lifeblood of commerce and industry. Accordingly, an increase in transport costs tends to have a knock-on-effect on the economy as a whole. Already the industry has indicated it will be impacted negatively by the open tolling system. We know from experience that workers would be the victims of retrenchments if firms see their profit margins impacted negatively.

3.5 This would compound the already bleak employment situation in the country. In the first three months of 2011 the rate of unemployment increased from 24% in the last quarter of 2010 to 25%. If the discouraged work-seekers are taken into account the rate of unemployment in the first quarter of 2011 is 38%. There are more than 2 million workers who have lost hope of ever finding a job. This is a crisis which would be made worse by the ORTS. The system will make it even difficult for the more than 4 million to go out and look for jobs. The country is therefore bound to see more and more workers discouraged to look for jobs. Already, the number of discouraged workers has increased by a massive 20% on an annualised basis.

3.7 We are aware that the majority of South Africans, if the sentiments expressed at public hearings on this system are anything to go by, are opposed to this ORTS. These include even those people who are supposed to enforce the system. Some municipalities have already expressed concern that the system will have a negative impact on the municipalities' road infrastructure due to diversion of traffic, result in administration burden and increase air pollution.

3.8 COSATU shares the concern that the system will move traffic congestion from highways to municipal roads, many of which are already in a bad state. This may result in municipalities increasing other tariffs in order to get funding to maintain municipal road infrastructure. In the context of high levels of unemployment, this would be disastrous.

3.9 Due to lack of good public transport system, workers and their families rely on taxis for their daily commitments. Because the taxi industry is not subsidised, it will pass the additional costs brought about by the ORTS to the commuters. According to the Taxi Alliance a 66c tariff would result in additional cost of about R38000 per taxi annually for 4 weekly trips between Johannesburg and Pretoria. This amounts to about R150 000 for a taxi operator with 4 taxis and excludes other fees imposed by the department. Ultimately, the commuter will be forced to pay for these additional costs.

4. Consultation

4.1 SANRAL says that there has been consultation before cabinet approved the plan in 2007. For us the consultation proper should have happen at NEDLAC. This matter had not been discussed there.

5. Our demands

5.1 The ORTS is aimed at consolidating privatisation of the nation's road network and thus making it only possible for those who can afford to pay and use them. The system will have a negative impact on the workers and the poor. It will result in job losses and possibly an increase in municipal tariffs for basic services. COSATU therefore rejects the ORTS.

5.2 COSATU demands proper consultation at NEDLAC on the solution to the problems around the road infrastructure. The discussion must centre around the provision of an integrated, reliable and safe public transport system.

5.3 COSATU further calls for an immediate stop on further privatisation in the transport sector. We call for more investment in the rail transport infrastructure. If there was meaningful investment in the rail transport infrastructure, the damage to the road network caused (and now solved through privatisation in the form ORTS) by the road freight would be minimal.

6. Respondents

6.1 The Department of Transport

Forum Building
Room 4111
159 cnr Struber and Bosman Streets
PRETORIA

6.2 The South African National Road Agency Limited

48 Tambotie Avenue
Val de Grace
PRETORIA

7. Nature of the protest action

7.1 Should there be no progress in addressing the challenges raised in this application, COSATU shall have no option but to mobilise it members for a protest which will take the form marches, demonstrations, pickets and stayaways.

Issued by COSATU, May 16 2011

Click here to sign up to receive our free daily headline email newsletter