Problems with the e-tolling Bill means that drivers won't yet have to pay to travel on Gautengs freeways. (Delwyn Verasamy, M&G)
The flaw means that the legislation has to be sent back to Parliament for consideration.
Zuma's lawyers are said to have advised him against signing the Transport Laws and Related Matters Amendment Bill because it would not survive a Constitutional Court challenge.
The decision will spare Zuma the pain of signing the controversial Bill – which has also been challenged by trade union federation Cosatu, an ANC ally – before the election.
In July, Transport Minister Dipuo Peters denied that Zuma was delaying signing the Bill because of the elections.
The problem, according to Mail & Guardian sources, is the tagging of the legislation as a section 75 Bill – that is, a Bill of national competence. Tagging is used by Parliament to classify Bills for the purpose of determining the procedure to be followed in enacting a piece of legislation. The Bill should have been tagged as a section 76 Bill, which would make it a Bill of provincial competence so that public hearings in the provinces could have been held.
Bills tagged as 76 are introduced in the National Assembly or the National Council of Provinces and must be considered by both houses. In the National Council of Provinces (NCOP), at least five provinces need to vote in favour of such Bills, usually considered by a provincial committee, which may also hold public hearings. If Zuma refers the Bill back to Parliament, processing it would have to start from scratch.
At fault is Parliament's joint tagging mechanism, a body consisting of the speaker, the deputy speaker and the chairperson and deputy chairperson of the National Council of Provinces. They are assisted by parliamentary legal advisers.
The Democratic Alliance has raised the issue of tagging and holding of public hearings on several occasions in the National Assembly and the National Council of Provinces.
At the last committee meeting to process the Bill, Elza van Lingen, the DA leader in the National Council of Provinces, pleaded with her colleagues to consider holding public hearings in the provinces.
Van Lingen said that another controversial Bill, the Protection of State Information Bill, had also been tagged as a section 75 Bill, but the National Council of Provinces committee had held public hearings into the legislation in all provinces in 2012. She was overruled.
The DA wanted the public hearings in all provinces, especially those in which e-tolls could be implemented in future. If the Bill is sent back to Parliament, it would be a blow to the South African National Roads Agency (Sanral), which had planned to start tolling in Gauteng in June this year.
Moody's downgraded Sanral's ratings in May 2012 over concerns of its financial sustainability.
This was "likely to exert pressure on the company's cash flows and cast doubt on the government's transport policy strategy", Kenneth Morare, Moody's lead analyst for Sanral, said at the time.
In April, Sanral issued a statement saying that e-tolling was ready to start, and it was just waiting for the completion of the parliamentary process. At the time, the Bill was still being processed in the National Council of Provinces. The National Assembly passed it on May 22 and sent it to Zuma to sign it into law.
This week, Sanral spokesperson Vusi Mona said, if Zuma had indeed received legal advice not to sign the Bill, he would find the advice "very odd" because the roads being tolled in Gauteng have nothing to do with other provinces.
Mona warned that taxpayers might have to pick up the tab for the building of Gauteng roads.
He said Sanral had not heard about a possible delay in signing the Bill, but if it occurred, "we would never switch on the system unless there is law".
"It would basically mean that somebody else would have to pick up the tab, and that somebody is you and me – the taxpayer."
Zuma's spokesperson, Mac Maharaj, said Zuma was still attending to the matter (the Bill) "and when he takes a step we'll inform the public".
He refused to answer questions about whether Zuma had received a legal opinion about the Bill, saying he did not deal with rumours.
According to the Parliamentary Monitoring Group, which records meetings of Parliament committees, the department of transport noted that after much deliberation it was deemed correct to tag the Bill under section 75 (national competence) instead of section 76 (provincial competence) of the Constitution, and it was not necessary for the matter to be referred to the House of Traditional Leaders.
"There was a great deal of concern [from MPs] about whether the public had been sufficiently engaged on the Bill," the monitoring group said. "As the Bill had been tagged as section 75, the NCOP was not authorised to veto the Bill but could only recommend amendments. However, the NCOP could hold public hearings.
"The department was of the view that there had been sufficient public engagement in the past on tolling in general as well as extensive consultation with various institutions on the contents of the Bill." The National Assembly held a public hearing on November 20 2012.