KillerX
Expert Member
Never mind Eskom, here's SANRAL
by Rob Handfield
SANRAL's Gauteng freeway tolls will
equate to doubling the fuel price. What
will this do to the region's economy,
and is anyone listening?
Could you afford to run your car if the petrol price doubled overnight? If you live in Gauteng, you ought
to start asking yourself that question, thanks to what the South African National Roads Agency Limited
calls the ‘user pays’ system of funding roads. Toll roads, in other words. Once the Gauteng Freeway
Improvement Project is completed and equipped with its open road tolling system in about 18 months, it will be virtually impossible to go anywhere on a freeway in Gauteng without paying a 50c / km toll.
For regular freeway users of typical cars, this increase in running cost will be about the same as doubling the fuel price. For trucks it might equate to the fuel price tripling or quadrupling. (“But won’t that wreck Gauteng’s economy?”)
Read on.
SANRAL claims that toll roads are fair and equitable because the people who use those roads pay the
direct costs – ‘user pays’. This is entirely incorrect. The user already pays and has done so for years. If this were not the case, we wouldn’t have a sealed road network at all. We pay twice, in fact. Firstly, a portion of our income tax goes to the Department of Transport to fund road safety and maintenance of the road network. And secondly, a considerable proportion of the fuel price goes towards the same end.
With the exception of a couple of toll roads, this is how all roads were financed in the past. If you work out what the fiscus derives from the fuel levy alone, it’s a fantastic amount, what with all those billions of litres being sold every year. Certainly it’s enough to maintain and
expand our road network. The problem is that the government has siphoned off those funds to pay for other things over the years, and bequeathed the roads problem to the next generation.
road conditions
Every five years, the CSIR releases a road conditions report. Since 1995 it has shown an alarming decay of our road network. This has had a major knock-on effect for the country in terms of transport costs, fuel costs, productivity and crashes. The person who was Chief
Director of Roads in the mid-1990s, Nazir Alli, didn’t do anything about this problem, nor did the SA Roads Board, of which he was a member. Instead, he was rewarded with the position of CEO of the newly-formed SANRAL in the early 2000s.
With the maintenance backlog now exceeding R100Bn, which is 10% of the total value of our road network, and the condition of the road network still in free-fall, we are currently an estimated five years from the majority of the network being in a “poor” condition. SANRAL’s
answer to this is to raise money for building new roads by tolling them, and justifying it with the “user pays” argument.
This argument is flawed because, when taken to its logical conclusion, it would imply that every single road in South Africa should be tolled to pay for its eventual replacement. And additionally, as I’ve explained, the user already does pay. Twice. Now they expect us to pay three
times. SANRAL’s answer to objections is that they want us to use the Gautrain. That’s a valid argument if you live within walking distance of a Gautrain station and use the Gautrain’s routes. But how many do and will? I’ve done my sums and worked out that it will still be
cheaper for me to use my private car to drive from Joburg to Pretoria rather than using the Gautrain and its feeder buses and a taxi at both ends of my journey. Besides, you won’t catch me on a bus or taxi until government fixes roadworthiness and driving standards of these
vehicles. Moreover, the Gautrain won’t run at night, meaning I have no option but to drive should I attend a function in Pretoria after 6PM or so. And the Gautrain doesn’t help me at all if I’m going from Weltevreden Park to Midrand.
anti-competitive
What about companies? Take, a grocery wholesaler, for instance - are they going to put all their fruit and veg on the Gautrain? Of course
not. And since trucks will probably be tolled higher than cars (R1.50 / km, I estimate), they’re going to suffer. A truck or bakkie that travels
200km per day on Gauteng’s freeways might end up paying more in monthly tolls than the finance instalment on the vehicle. This is anticompetitive
and will be untenable for smaller transport companies; many will go bankrupt. The larger ones will simply add the cost to their
bill, which will in turn be passed onto us by way of more expensive onions, shoes or aspirin.
So the users won’t be actually be paying thrice over. They’ll be paying four times or more. This will do untold damage to the economic
heartland of South Africa, as well as stifling entrepreneurship and making the poor poorer. It will also drive up traffic crashes and urban
congestion as people flee to the back routes.
Roads are not a profit centre, they are an economic enabler, like railways and telecoms. Their capital cost is an investment in GDP and
employment, and the profit is returned in better standards of living and economic growth, resulting in higher taxation revenue for
government.
SANRAL beats Eskom
Gautengers are so obsessed with Eskom’s tariff hike that they don’t realise that the new freeway tolls will hit their pockets much harder.
This is a handy distraction for SANRAL as it sneaks an inequitable and catastrophically inflationary system into operation.
It’s a nice idea to think that ‘user pays’ will work in Gauteng, but it’s unrealistic - there were cases of single parents not being able to afford
to drive their children to school when the fuel price went up by 40% a couple of years ago! The average transport company, salesperson,
or roadside assistance organisation doesn’t physically have the money to pay a monthly toll bill of thousands per vehicle per month.
The Parliamentary Portfolio Committee on Transport needs to take a close look at the Gauteng tolling proposal, and ask the simple
question: can the country’s economic heartland sustain the imposition of a stealth tax which equates to a doubling of the fuel price? The
answer is obvious.
by Rob Handfield
SANRAL's Gauteng freeway tolls will
equate to doubling the fuel price. What
will this do to the region's economy,
and is anyone listening?
Could you afford to run your car if the petrol price doubled overnight? If you live in Gauteng, you ought
to start asking yourself that question, thanks to what the South African National Roads Agency Limited
calls the ‘user pays’ system of funding roads. Toll roads, in other words. Once the Gauteng Freeway
Improvement Project is completed and equipped with its open road tolling system in about 18 months, it will be virtually impossible to go anywhere on a freeway in Gauteng without paying a 50c / km toll.
For regular freeway users of typical cars, this increase in running cost will be about the same as doubling the fuel price. For trucks it might equate to the fuel price tripling or quadrupling. (“But won’t that wreck Gauteng’s economy?”)
Read on.
SANRAL claims that toll roads are fair and equitable because the people who use those roads pay the
direct costs – ‘user pays’. This is entirely incorrect. The user already pays and has done so for years. If this were not the case, we wouldn’t have a sealed road network at all. We pay twice, in fact. Firstly, a portion of our income tax goes to the Department of Transport to fund road safety and maintenance of the road network. And secondly, a considerable proportion of the fuel price goes towards the same end.
With the exception of a couple of toll roads, this is how all roads were financed in the past. If you work out what the fiscus derives from the fuel levy alone, it’s a fantastic amount, what with all those billions of litres being sold every year. Certainly it’s enough to maintain and
expand our road network. The problem is that the government has siphoned off those funds to pay for other things over the years, and bequeathed the roads problem to the next generation.
road conditions
Every five years, the CSIR releases a road conditions report. Since 1995 it has shown an alarming decay of our road network. This has had a major knock-on effect for the country in terms of transport costs, fuel costs, productivity and crashes. The person who was Chief
Director of Roads in the mid-1990s, Nazir Alli, didn’t do anything about this problem, nor did the SA Roads Board, of which he was a member. Instead, he was rewarded with the position of CEO of the newly-formed SANRAL in the early 2000s.
With the maintenance backlog now exceeding R100Bn, which is 10% of the total value of our road network, and the condition of the road network still in free-fall, we are currently an estimated five years from the majority of the network being in a “poor” condition. SANRAL’s
answer to this is to raise money for building new roads by tolling them, and justifying it with the “user pays” argument.
This argument is flawed because, when taken to its logical conclusion, it would imply that every single road in South Africa should be tolled to pay for its eventual replacement. And additionally, as I’ve explained, the user already does pay. Twice. Now they expect us to pay three
times. SANRAL’s answer to objections is that they want us to use the Gautrain. That’s a valid argument if you live within walking distance of a Gautrain station and use the Gautrain’s routes. But how many do and will? I’ve done my sums and worked out that it will still be
cheaper for me to use my private car to drive from Joburg to Pretoria rather than using the Gautrain and its feeder buses and a taxi at both ends of my journey. Besides, you won’t catch me on a bus or taxi until government fixes roadworthiness and driving standards of these
vehicles. Moreover, the Gautrain won’t run at night, meaning I have no option but to drive should I attend a function in Pretoria after 6PM or so. And the Gautrain doesn’t help me at all if I’m going from Weltevreden Park to Midrand.
anti-competitive
What about companies? Take, a grocery wholesaler, for instance - are they going to put all their fruit and veg on the Gautrain? Of course
not. And since trucks will probably be tolled higher than cars (R1.50 / km, I estimate), they’re going to suffer. A truck or bakkie that travels
200km per day on Gauteng’s freeways might end up paying more in monthly tolls than the finance instalment on the vehicle. This is anticompetitive
and will be untenable for smaller transport companies; many will go bankrupt. The larger ones will simply add the cost to their
bill, which will in turn be passed onto us by way of more expensive onions, shoes or aspirin.
So the users won’t be actually be paying thrice over. They’ll be paying four times or more. This will do untold damage to the economic
heartland of South Africa, as well as stifling entrepreneurship and making the poor poorer. It will also drive up traffic crashes and urban
congestion as people flee to the back routes.
Roads are not a profit centre, they are an economic enabler, like railways and telecoms. Their capital cost is an investment in GDP and
employment, and the profit is returned in better standards of living and economic growth, resulting in higher taxation revenue for
government.
SANRAL beats Eskom
Gautengers are so obsessed with Eskom’s tariff hike that they don’t realise that the new freeway tolls will hit their pockets much harder.
This is a handy distraction for SANRAL as it sneaks an inequitable and catastrophically inflationary system into operation.
It’s a nice idea to think that ‘user pays’ will work in Gauteng, but it’s unrealistic - there were cases of single parents not being able to afford
to drive their children to school when the fuel price went up by 40% a couple of years ago! The average transport company, salesperson,
or roadside assistance organisation doesn’t physically have the money to pay a monthly toll bill of thousands per vehicle per month.
The Parliamentary Portfolio Committee on Transport needs to take a close look at the Gauteng tolling proposal, and ask the simple
question: can the country’s economic heartland sustain the imposition of a stealth tax which equates to a doubling of the fuel price? The
answer is obvious.
