http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 13.76Change: 0.11
R/$ = 10.96Change: 0.10
Au 1193.42 $/ozChange: 4.09
Pt 1213.50 $/ozChange: 10.00
 
 
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?








Start
 
End
 
 
And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
 
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Tenders Suppliers Directory Research Jobs Announcements Contact Us
 
 
 
Article   Comments   Other News   Research   Magazine  
 
 
Jun 15, 2012

The intriguing silence of business on user-pay principle

Back
Africa|Defence|Environment|Projects|System|Waste|Africa|China|India|South Africa|United States|E-toll|Media Briefings|Infrastructure|Pravin Gordhan|Waste
Africa|Defence|Environment|Projects|System|Waste|Africa|||Infrastructure|Waste
africa-company|defence|environment|projects|system|waste-company|africa|china|india|south-africa|united-states|e-toll|media-briefings|infrastructure|pravin-gordhan|waste
© Reuse this



It is interesting that business, which has expressed genuine concern about the dominant role being played by government and State-owned companies in the R845-billion infrastructure roll-out, has not joined government in vociferously defending the user-pay principle.

Finance Minister Pravin Gordhan has been left to lead the defence through court papers, as well as during media briefings relating to the proposed implementation of an electronic toll collection system to secure fees from users to pay for Gauteng’s upgraded motorways.

For him, it is about ensuring that the country does not foreclose on any of the possible options available to fund an investment programme that is arguably emerging as South Africa’s main growth engine in a context of serious global economic uncertainty.

Without doubt, the outlook in many European economies, which remain key trading partners, appears to have worsened materially over the past few months and many believe any economic recovery could involve five to ten years of painful convalescence. Growth rates in countries such as China and India are also slowing and there is also rising concern that the so-called 2013 ‘fiscal cliff’ in the US could put that vital economy, and by extension the rest of us, even further on to the back foot.

Gordhan has, thus, called for the e-toll emotion to be set aside and for South Africans to grasp that there are only “limited sources of funding from which we can pay for the things we desire”. User charges, he asserts, are a crucial element and have to be included in a mix that also comprises direct fiscal allocations, debt raising and public–private partnerships (PPPs).

“It is very important that the principle of user-pay and of user chargers is not undermined through this process and through the emotion, and that we are able to sustain our ambition to provide the kind of infrastructure that will impact positively not only on our economic potential, but also on the environment in which our people live,” Gordhan has argued.

One would have thought that organised business would have jumped to support Gordhan in this, particularly given that business is the champion of the PPP concept and PPPs can generally only take place in an environment where a user-pay ethos prevails.

Instead, business has been all but silent, having been seemingly swayed by those elements within its structures that prefer a payment method premised on adding to the overall tax burden.

Such a reaction is arguably only natural, given the vitriol surrounding e-tolling. But business organisations should not be surprised by future backlashes against PPP projects that will, no doubt, be premised on the user-pay principle.

Possibly, business has reached this seemingly contradictory position owing to the breakdown of the trust relationship between it and govern- ment.

Business has lost faith in government’s ability to deliver on its policy, is frustrated by the lack of PPP progress and is angry at the high level of waste and corruption surrounding the public sector and its projects.

In other words, a mist of mistrust has descended and instead of seeking to see through it, business has opted to settle into an oppositional stance that may well undermine its long-term interests.

Edited by: Terence Creamer
© Reuse this Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
Other Editorial Insight News
Given the prevailing uncertainty about Eskom's ability to keep the lights, it came as something of a relief to hear that the bidding process for the long awaited ‘baseload coal’ independent power producer (IPP) procurement programme is set to begin shortly and that...
South Africa has been ranked third, after China and Brazil, in a new country-by-country assessment of 55 renewable-energy markets in Africa, Asia, Latin America and the Caribbean. The Climatescope 2014 report and index, which has been compiled by Bloomberg New Energy...
There may be no consensus on the size of Africa’s middle class, but there is, nevertheless, broad-based agreement on two things: firstly, that the African middle class is growing and, secondly, that its rise is important to the continent’s future prospects. A new...
More
 
 
Latest News
Industrialisation remains a major part of the South African developmental agenda and an important vehicle towards achieving the Department of Trade and Industry’s (DTI’s) target of creating 100 black industrialists in the next five years, Trade and Industry...
The construction of a new innovation hub in the heart of the Dube TradePort, in Durban, was set to kick off in March 2016, as Dube TradePort Corporation sealed a R160-million lease agreement with Eureka Capital. Eureka Capital planned to develop a seven-storey 21 500...
A month before it plans to list on the main board of the JSE, property group, the Pivotal Fund has posted a net asset value per share excluding deferred tax (NAVPS) for the six months ended August 31, of R15.55 – a 5.9% increase on the NAVPS at the end of the...
More
 
 
Recent Research Reports
Defence 2014: A review of South Africa's defence industry (PDF Report)
Creamer Media’s Defence 2014 report examines South Africa’s defence industry, with particular focus on the key participants in the sector, the innovations that have come out of the sector, local and export demand, South Africa’s controversial multibillion-rand...
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move road...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
Real Economy Insight: Construction 2014 (PDF Report)
This five-page brief covers key developments in the construction industry over the past 12 months. It provides an overview of the sector and includes details of employment in the sector, infrastructure and municipal spending, as well as insight into companies’...
Real Economy Insight: Electricity 2014 (PDF Report)
This five-page brief covers key developments in the electricity industry over the past 12 months, including details of State-owned power utility Eskom’s generation activities, funding and tariffs, independent power producers and prospects for the sector.
 
 
 
 
 
This Week's Magazine
JSE-listed real estate investment trust (REIT) Rebosis Property Fund achieved a distribution growth of 8.1% to 99.45c per linked unit in the financial year ended August 31, despite volatile market conditions.
JAMES ROBERTS The MOM incubator was designed to help babies in developing nations who were dying in conflict-struck nations or who do not receive hospital care
A low-cost, inflatable incubator won this year’s international James Dyson design award, which aims to encourage and inspire the next generation of design engineers.
The World Bank released its ‘Doing Business 2015: Going Beyond Efficiency’ report last month and ranked South Africa 43 out of 189 global economies for its ease of doing business, with Singapore topping the rankings.
Air Products South Africa officially launched its R300-million Eastern Cape air- separation unit (ASU), at its new manufacturing facility in the Coega Industrial Development Zone (IDZ), earlier this month. It is the second facility that Air Products launched in South...
BMW South Africa (SA) has signed a power purchasing agreement with energy company Bio2Watt. The offtake partnership will bring renewable energy to the carmaker’s Rosslyn plant, north of Pretoria.
 
 
 
 
 
 
 
 
 
Alert Close
Embed Code Close
content
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
 
 
Close
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks