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Four objections to the Gauteng toll

11 November 2011 Gareth Stokes
Gareth Stokes, FAnews Online Editor

Gareth Stokes, FAnews Online Editor

The South African National Roads Agency (Sanral) has come under the media spotlight in recent months. Chief executive, Nazir Alli, has spent hours defending the fund raising mechanism for the Gauteng Freeway Improvement Project (GFIP). The first phase of

The R17.5 billion (Sanral’s number) spent on renovating existing public freeways will be collected from motorists through a fancy “user pays” tolling system. Well that’s the plan at this stage. There have been numerous objections from the likes of Business Unity South Africa, ordinary road users and even the Congress of South African Trade Unions (Cosatu). Although government has tried to appease the masses by holding post-implementation public hearings, we wouldn’t hold our breath for a reversal of the tolling decision. The fact that the toll operator contract was signed a number of years ago, the infrastructure is in place, the toll outlets are up, running and staffed and Sanral is already calling for motorists to register their vehicles should indicate to you where this is headed. From February 2012 we will have to pay to use a network of roads with few viable alternatives! For what it’s worth, here are four of my objections to the system.

The first objection: We have paid – and still pay for – use

Motorists – and South African taxpayers – can argue that they have already paid for the Gauteng freeways. The bulk of the existing road network had been built with public money, from government’s expenditure budget and from various levies on fuel. Aside from income tax and VAT, motorists also contribute approximately 30% of the pump price of each litre of fuel to state coffers – including 80c/litre to the Road Accident Fund Levy and 177.5c for a General Fuel Levy. These levies are a sore point, because it is clear that over time the bulk of the general fuel levies have been allocated to non-road expenditure…

In choosing to raise funds for the Gauteng road improvements by tolling, government has simply offered up an asset we paid for, via its road agency, to a multi-national private company headquartered in Austria. Put another way – we (the people who paid for the roads initially) are paying a private company around R6.2 billion until 2019 to manage a section of highway that should have been maintained out of public funds. And now, instead of just paying for the ongoing maintenance and upgrade of our asset, we are also paying an offshore company so that they can collect the money to pay for it from us.

The second objection: We don’t really know what we are paying for

I’ve trawled the Internet for information on GFIP… There’s plenty of information about the project and its benefits. And as expected, there are as many pro-tolling articles (from Sanral and other beneficiaries) as against (from consumers, both private and commercial). The information we can’t get our hands on is the cost of the project. Has our money been sensibly spent? We cannot tell. Google the matter and you will find dozens of reports about how much money has been plunged into the upgrades… Is it R17.5 billion? Is it R20 billion or R26 billion? And how much does it balloon to when inflation is factored in? Nobody seems to know.

Was the tolling contract really awarded to the cheapest bid? Again we don’t know. But it seems the R6.2 billion mentioned earlier will easily climb by R3 billion to accommodate inflation. We also don’t know the identities of many of the South African “parties” involved in the joint venture. An Austrian multi-national Kapsch and Cape Town-based TMT Services and Supplies are partnered in the deal, but TMT lists strange subsidiaries such as Berrydust 51 (Pty) Ltd, Crestwave 61 (Pty) Ltd and Crestwave 63 (Pty) Ltd. In their 2010/11 Annual Report Kapsch refers to these subsidiaries as follows: “With regard to additional disclosures in accordance with Section 265 (2) UGB for the companies mentioned above, the protection-of-interest clause pursuant to Section 265 (3) UGB was applied.” Sounds a bit like the secrecy bill… In my humble opinion – if I am expected to pay for the maintenance and upgrade of the roads and for the administration of a toll collection system – then I should know who has been contracted on my behalf. I want to know exactly how much I’m paying and to who!

The third objection: A flawed “user pays” system

Government is fully aware of resistance to the tolling proposal. And the unspoken threat of an uprising from the taxi industry forced them to abandon a fair “user pays” system by offering exemptions to taxis and buses using the improved freeways. My third objection to the proposed tolls is as follows: Why should the fifteen individuals in a minibus taxi, for example, object to paying their one fifteenth share of the “user pays” toll? What gives the occupant in a taxi or bus more or less of a right to the use the publicly funded road than you or I? If the principle for funding of the road development is “user pays” then all users should pay. And I haven’t even touched on the ability of the toll administrators to extract a payment from all of the tolled road users…

The fourth objection: A flawed collection system

A number of economists have been extremely vocal about the inefficiency of a tolling system as a funds collection mechanism. First, there are millions each year in unnecessary additional administration expenses. Second, the billing system relies on motor vehicle registrations to track vehicle owners – a database which is hardly as accurate as it needs to be. The risk is that the number of people who refuse to pay (resist) or aren’t billed (because they cannot be reached) will exceed those who do. I’m all for ring fencing the existing general fuel levies (or some part of it) to fund all of Sanral’s grandiose schemes. If more funs are needed it will certainly be cheaper to raise the levy by a few cents per litre than to build a massive tolling infrastructure with each and every new road. I propose a single simple levy, collected via a mechanism already in place, where all citizens contribute equally to the upkeep of the country’s road infrastructure.

Editor’s thoughts: Public discussions on the future of Gauteng’s tolling system are apparently underway. But everywhere we turn there is evidence the system will go ahead as planned from February 2012. Should we resist this tolling initiative – or do you think the proposed arrangement is sensible? Please add your comment below, or send it to gareth@fanews.co.za

Comments

Added by Anru, 15 Nov 2012
The government.do not understand their function. To be in government of any form of local government service means that you have to word. They are paid salaries to perform a function, not to enrich themselves. If the government monies are spend as well as SARS collect revenue, their will be enough money for infra structure. Stop paying children and women to have children. The world is over populated as it is. The toll process is flawed due to the huge administrative costs. We have no guarantee that the roads will be maintained well. Look at so many other toll roads in SA that is no longer in a good state, but we need to pay - Jhb to Bloem, Dbn to Rbay. Somewhere in the toll sage is some form a corruption and government officials that benefit outside of normal pay. Stop the tolls and use tax more effectively. I believe there is enough tax money in this country to pay for all our public needs, if the tax money does not land up in government officlas pockets through corruption and stupid money wasting projects, overseas travels, parties, ect, ect. Stop wasting our money, Government !!!
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Added by Bidnis Man, 22 Nov 2011
There was only one reason to go the toll route: tenderpreneurship. Additionally, the contractors are all under investigation by the competitions commission. The ANC is going to suck every last cent from the tax paying public. As financial planners we should be seriously considering an immegration plan for clients who can afford it.
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