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Jul 20, 2012

The costs and benefits of SA’s toll-road outrage debated

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Pretoria|Africa|Arup|Consulting|Flow|PROJECT|Rental|Road|Roads|South African National Roads Agency Limited|System|Transportation & Traffic Technology Africa MD|Water|Africa|United States|Constitutional Court|Building|E-tolling|Flow|Logistics|Road Infrastructure|Service|Services|Transport|Gerard De Villiers|Infrastructure|John Sampson|Malcolm Mitchell|Water|Wayne Duvenage
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There are many reasons the Opposition to Urban Tolling Alliance (Outa) is against the tolling of Gauteng’s freeways, says chairperson Wayne Duvenage, one of these being what the alliance believes has been a lack of consultation on the project.

“If you get 28 responses out of millions of people in Gauteng, then the consultation process was a complete failure. “None of us were aware of what was happening,” he notes.

“We saw in 2006 that some tolling strategy was put forward, but when the decision was taken, none of us knew a thing. “The South African National Roads Agency Limited (Sanral) did the absolute legal minimum when consulting with affected communities – not the maximum. “You want billboards when you do this kind of thing. Ninety-nine per cent of people did not know about the system – that is not canvassing; that is a failure.”

An interdict to prevent the launch of e-tolling on Gauteng’s freeways was granted by the North Gauteng High Court, in Pretoria, in April, pending a review of the decision to toll those freeways.

The interdict application was made by Outa.

The

National Treasury and Sanral have since filed an application for leave to appeal against this decision in the Constitutional Court, which will be heard in August.

Outa represents groups such as the Southern African Vehicle Rental and Leasing Association, the Retail Motor Industry Organisation and the South African National Consumers Union.

Listing the many reasons Outa is opposed to electronic toll collection on urban freeways, Duvenage says it remains unclear what the exact cost of toll collection will be, as Sanral has not been prepared to share that information.

He says Outa knows that the cost of the five-year contract between the Electronic Toll Collection (ETC) consortium and Sanral for electronic toll collection is R8.3-billion, or R1.6-billion a year, but what this figure includes in unclear.

He says Outa considers R1.6-billion a year to be too high, especially in relation to the costs incurred in building the roads.

“Is if fair to pay R1.2-billion to R2-billion a year just to collect tolls? Is it right to thrust these costs onto an already overburdened and overtaxed society?”

Duvenage adds that paying R550 a month in toll fees, as capped by Sanral in an effort to curb costs to consumers, will still “affect people enormously”.

Another argument against the implementation of urban tolling is that good-quality public transport is not yet available everywhere in Gauteng, and neither has there been an effort to establish drop-off points allowing motorists to drive together and save on costs.

“I think people want to use public transport, but it is not there,” says Duvenage.

He adds that Outa believes that 10% to 15% of all Gauteng licence plates are cloned, which will create problems in terms of electronic toll collection.

Outa also believes that e-tolling in Gauteng will push up this number to 25%, which has not been factored into the collection model, notes Duvenage.

He adds that the ‘user pays’ principle, as embodied in toll roads and punted by Sanral, cannot be valid for Gauteng only. Should the agency truly believe in this principle, every South African road, old and new, would have to be tolled.

Duvenage surmises that a ringfenced fuel levy is not an unfair mechanism to collect the money for the new roads built in Gauteng.

Indeed, it is “the most equitable” form of the ‘user pays’ principle.

While it would ask drivers outside the province to contribute to the province’s new roads, it must also be considered that Gauteng puts four times more into the national fiscus than what it receives come national budget time, he elaborates.

It also costs almost nothing to collect the fuel levy.

A more efficient Gauteng economy means a more efficient South African economy, says Duvenage.

Fuel Levy Advantages
Consulting firm Transportation & Traffic Technology Africa MD Dr John Sampson concurs with Duvenage when he says a fuel levy is indeed “the best way” for the user to pay for the Gauteng Freeway Improvement Project (GFIP) system, as it allows someone with a smaller car, and, therefore, with lower fuel consumption, a lower carbon footprint and lower impact on the road infrastructure, to benefit.

“Tolling is a very expensive way of collecting tax. To my knowledge, [it is] by far the most expensive way of collecting tax. “This is probably my biggest concern – tolling is a very inefficient tax.”

Sampson argues that around 50% of all money collected on the GFIP network would go towards paying for the collection process.

“If the public is going to pay anyway, why use a tax that is inefficient? “There are dozens of ways to collect money, and toll tax is the worst possible method to collect money.”

He adds that toll roads do not constitute an equitable form of the ‘user pays’ principle.

“They may seem to comply with the ‘user pays’ principle on casual inspection but, in fact, the user pays excessively for the tolled sections of the road, which make up only a tiny part of the road network, and travels free on the remainder.”

Engineers and the public should not have to accept that, if roads are not tolled, “you will get [no infrastructure]”, adds Sampson.
“Roads should be funded by using the most efficient means possible of raising taxes and citizens should get the services they need and have paid for.”

Possible Problems
One problem with the fuel levy as a means of paying for road infrastructure is that, South African Roads Federation executive director Dr Malcolm Mitchell believes, the fuel levy will come under pressure in the years ahead.

A US study has shown that improved engine technologies, for example, will cut the fuel tax base by up to 20% by 2025.

Mitchell adds that much of the recent furore over the Gauteng toll roads has been driven by political agendas, rather than the issue itself.

He also notes that people appear to accept the ‘user pays’ principle for water and electricity, but not for roads.

Mitchell says a train system, punted in earlier years, may possibly have solved the traffic problem in Gauteng had it been implemented. He also cautions against the continued postponement of infrastructure decisions.

Arup transport planning logistics specialist Gerard de Villiers, speaking in his private capacity, concurs, noting that better public transport is a necessity in a province such as Gauteng. He adds, however, that toll roads are prob- ably the best motivation for people to leave their cars behind and make use of public transport.

He also notes that any protests taking place should be for alternative travel options to be implemented, and “not against tolling”.

Metrorail should, for example, “get its house in order”.

Court Action Casualty
An unfortunate side effect of Outa’s court case has been that any further phases of the much-needed GFIP project have been shelved, comments Sampson.

“This was the first casualty of Outa’s court case.”

Duvenage is adamant that it was never Outa’s intention to halt the roads infrastructure process, or its funding flow; neither did it want to destabilise the country’s or Sanral’s credit rating by hampering the government agency’s ability to service the debt incurred in building the roads – which is what has happened owing to the delay in starting toll collection.

He says Outa is opposed to e-tolling as “put forward by Sanral in Gauteng”, with the main focus on the high administration costs of collecting the toll fees.

“We are not opposed to long-distance tolling as we know it,” he notes. “We can stomach it, as we take these roads occasionally and there are alternatives. But if I use a road as my daily road, then it is a very different principle.”

Duvenage adds that it is important for Outa not be “suckered into a 5c/km” urban toll solution, as fees would be “back up there in two years where government wants them to be”. • Duvenage, Sampson, Mitchell and De Villiers spoke at the Saice Civil Talk debate held on June 25.

Edited by: Martin Zhuwakinyu
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