Is Gauteng's e-tolling project a win-win solution or a one way street? We've gathered two very diverging opinions - one from Sanra's CEO Nazir Alli and the other from Brendan Seery of Independent Newspapers.
FUEL LEVIES WOULD NEVER HAVE BEEN SUFFICIENT
By Nazir Alli
The SA National Roads Agency Limited (Sanral) is concerned about recent reporting that indicates that some members of our society view toll roads as a punishment instead of the service that they really are.
Sanral would therefore like to take this opportunity to explain why the Gauteng Freeway Improvement Project (GFIP) was initiated in the first place: as a service, not a punishment.
Before work on the GFIP started, traffic on Gauteng’s major highways was steadily increasing, with peak hours said to have been extending by about 15 minutes every year.
Not only was this adversely affecting road users in the form of increased vehicle running costs, but the congestion was also constraining the province’s ability to sustain economic growth.
“Benefits outweight costs”
The benefits of the improvements far outweigh the costs to the motorist.
The GFIP was therefore initiated as a solution for both road users and the province. The project was never proposed as a punishment and neither are any of the other toll roads across the country.
It is important to note the history regarding this project. The decision to toll the freeways was not taken lightly, and went through several approval processes that involved all spheres of the government, the cabinet as well as the public.
The tolling of the freeways was highly publicised by all media. Talk Radio 702 even did an outside broadcast at the time from the Sanral Intelligent Transport Centre in Midrand for its breakfast show, during which calls were taken from the public regarding e-tolling.
Sanral therefore disagrees with the claim that the public was not informed about the tolling principle before the commencement of construction.
In fact, construction could start only once the toll principle was approved, after the legal processes for approval.
Upgrading highways because of the high volumes of traffic that had to be accommodated during the construction phase adds to the construction costs, as well as the number of interchanges that had to be upgraded. The finance model for the project was therefore a very important consideration.
Many people have asked why the fuel levy was not used as a funding model instead of the user-pays principle.
The first shortcoming in this proposal is that the fuel levy is by law not ring-fenced for road infrastructure development.
The funds collected through the fuel levy go into the central fiscus.
Furthermore it was evident that the fuel levy was inadequate for financing the country’s road infrastructure projects.
In 2009/10, for instance, R22 billion was collected nationally through the fuel tax.
However, in the same year R29bn was allocated from the fiscus towards national, provincial and local roads projects.
From this it can be seen that had a dedicated fuel tax been used for roads instead, there would have been a shortfall of R7bn in the money available for roads infrastructure projects.
One can also see from this that the centralised tax allocation was actually beneficial for roads agencies.
The contribution from the fuel levy also reduces with time as the fuel efficiency of vehicles improves.
“Only other option”
The only other option available to fund the project was tolling.
Once again because of the high traffic volumes carried on the affected highways, special consideration had to be made about the type of tolling that would be suitable for the GFIP.
Traditional tolling (with booms) was ruled out because it would not help in creating the free-flowing traffic that was needed.
An open road toll system was chosen as the tolling model that would best suit the circumstances in Gauteng because it enables tolls to be collected without road users having to stop or even slow down.
Road users are already experiencing more free-flowing traffic that has been made possible through the GFIP upgrades.
To ensure that this benefit is enjoyed with as little impact as possible on the road user’s pocket, provisions have been made that have made it possible for road users to get a discount of 48 percent on their toll tariffs. Further discounts are also made available for frequent users and road users who travel during off-peak periods.
This is surely the win-win situation that we were hoping for.
Now let’s look at the other side of the coin:
LET’S CALL TOLLING WHAT IT IS - A TAX
By Brendan Seery
In The Sunday Independent this week, referring to questions about the project, Sanral chief Nazir Alli wrote: “Many of the answers given by opponents of tolling were designed to sow disinformation and even downright lies.”
Really?
In the Sunday Independent piece, Alli refers to the “savings” road users will make by paying tolls, claiming that the argument of the haulage industry that tolls will be inflationary is “flawed”.
He writes: “The saving on vehicle operating costs is enormous. In terms of the industry’s own research, the cost differential in using poor instead of good roads could be as high as 120 percent.
“This is damage cost caused by potholes and the other hazards of poorly maintained roads. The savings in fuel efficiency for the industry are self-evident.”
Here’s the reality
The “research” Alli is referring to he has cited previously. It was carried out by the CSIR (www.csir.co.za/publications/ pdfs/2.2_SS_BE_transport&logistics_chap1.pdf) and mentions the figure of 120 percent as the increase in maintenance and repair costs for the same truck running on a tolled road as opposed to an untolled, and badly maintained, road.
What the CSIR – amazingly – failed to include in this cost-benefit scenario was the actual costs of tolls.
When these are added, then, even with the hugely increased maintenance costs, it is still cheaper to use the alternative route.
Alli has been blithely using this patently incorrect assessment as a way to justify the toll charges.
In February last year, I pointed out the bad maths and logic in this example and challenged Alli to prove that my assertions about TOTAL running costs were incorrect. There was a deafening silence.
A new, but equally flawed argument, which Alli has just thrown into the mix (presumably in an attempt to embarrass Cosatu) is that cancelling e-tolling would cost 1200 people their jobs.
“If the project doesn’t go ahead, will it be Zwelinzima Vavi who’s opposing the project who will tell them they no longer have jobs?” Alli asked.
Here’s the reality: Vavi never created those jobs, you did, Mr Alli. How many people like domestic workers and gardeners might see their jobs shrink or disappear as middle-class wage earners having to pay R550 a month have to tighten their belts?
How many jobs could have been created in SA for the billions of rand that will flow out of the country to your foreign partners who will collect the toll?
“Voodoo economists”
Now, we have even more voodoo economists jumping into the publicity fray to justify the toll project.
This week, Dr Paul Vorster, CEO of The Intelligent Transport Society of SA, argued in support of the tolls by quoting Dr Roelof Botha, an academic at the Gordon Institute of Business Science.
Botha claims improved freeways mean massive economic benefits for everyone.
Writing in The Times, Vorster said Botha calculated that: “If motorists productively use at least 15 percent of the time they save as a result of the improved roads, for every R1 they pay for the tolls, about R8.84 will accrue to them.”
So, if I travel to Pretoria and back, I will pay an extra R40 in toll fees. Let’s be generous and accept that I will save 15 minutes each way in journey time because of the new toll system – half an hour in total.
Now, following the logic of Vorster/Botha, I utilise 15 percent of that time – say five minutes – I will save 40 x R8.84… in other words, R353.60. So my time is worth an astronomical R4243 an hour… I don’t think so.
Last year, after the announcement of the original 66c/km toll rate, Alli accused me, on Talk Radio 702, of not understanding.
In return, I said to him: “Mr Alli, if it looks like a duck, if it walks like a duck and if it quacks like a duck, it is a duck. So let’s call this toll what it is – a tax.”
I stand by that. But what worries me is that, though it may be a tax (one which could equally well have been levied through another mechanism, like an additional fuel tax), most of it will be bleeding away into a foreign bank account.
Sad to say, in that respect, the Gauteng Freeway Improvement Project is horrifyingly reminiscent of the arms deal. Plenty of rubbish around numbers: remember the “counter-trade” deals that claimed that as many as R10 would be invested in the country for every R1 spent on the weapons purchases?
And, yet again, the main beneficiaries will be white men – whether in construction companies in SA or companies in Europe. Viva progress, viva!