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Economists praise ex-Sanral chief

Nazir Alli, the former chief executive of the SA National Roads Agency Limited (Sanral), has been the controversial figure at the centre of the row over the stalled Gauteng Freeway Improvement Project. But economists have praised his broader role as Sanral head. And some have suggested he is the scapegoat who has taken the rap for the public relations disaster of the scheme, though the government has been a major role player.

Azar Jammine, the chief economist at Econometrix, said Sanral had rolled out projects more successfully than other parastatals and the improved national road network was evidence he did a good job.

Outgoing Sanral chief executive Nazir Alli. Photo: Dumisani Sibeko. Credit: INLSA

He said the government should accept responsibility “for the mess around scheme”.

Chris Hart, an economist at Investment Solutions who is opposed to e-tolling, said Alli had been at the helm of “one of the best-run government agencies that ranked alongside the SA Revenue Service in terms of delivery”.

Alli consistently refused to provide information on how Sanral arrived at the quantum of tariffs or who benefited from the scheme.

Vaughan Mostert, a public transport lecturer at the University of Johannesburg, said that the controversy owed much to the fact that the public had been misled about the availability of public transport as an alternative to the Gauteng highways. Mostert said that car usage in the Gauteng region was growing at between 5 percent and 7 percent a year – testimony to the absence of adequate public transport.

Mostert described the decision of the Gauteng North High Court to halt Gauteng e-tolling pending a review as “a watershed judgment” and expressed the hope that “light could be shed on some other murky corners”.

He expressed concern at the influence wielded by the construction industry over transport planning processes.

He said the implementation of the rapid rail Gautrain between Johannesburg and Tshwane, in the face of public opposition, had created the impression that projects would be implemented regardless of their merits as long as the government agreed.

Jammine identified another serious flaw in the e-tolling scheme: the exorbitant collection and enforcement costs.

The same amount of revenue could be collected by raising the fuel levy by 9c a litre.

He blamed users and the government for making “much ado about little”.

Referring to consumers, he said the revenue from tolls was originally estimated at R3.6 billion a year.

The revisions to toll fees and the exemption of taxis, he said, implied R2bn to R2.5bn would come from users’ pockets.

Given total private consumption worth about R1.6 trillion a year, this amounted to between R1.20 out of every R1 000 spent by consumers. And he noted that consumers were not cash strapped. A sign was that retail sales had increased by 7.2 percent year on year in February in real terms – with inflation stripped out.

As to the government, the estimated cost of servicing Sanral’s R19.6bn loan is about R2.4bn a year. “That is equal to 0.25 percent of government spending, not likely to destroy government’s fiscal credentials,” Jammine said.

The real issue, said Jammine, was whether the delayed start to the e-tolling scheme and the uncertainty around its future would harm future foreign investment potential.

Moody’s Investors Service, which has cut Sanral’s credit rating two notches to Baa2 since February, said yesterday: “Notwithstanding the ongoing challenges which led to the agency’s downgrade last week, Sanral’s rating remains supported by its legislative framework and close operational and financial linkages with the South African government.

“The resignation of the chief executive as a singular event does not have an impact on Moody’s rating for Sanral.”

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