The South African National Roads Agency Limited (SANRAL) says 405 957 direct job opportunities are being lost due to the inability of the Agency to collect enough revenue to complete 15 key road infrastructure projects worth R154.8 billion in Gauteng, Kwazulu-Natal and the Eastern and Western Cape.
This emerged during a Transport Forum Special Interest Group event – ‘Roads and the Economy’ – held in Woodmead, Johannesburg, last week.
Among the 15 key SANRAL projects on hold are phase two and three of the Gauteng Freeway Improvement Project, the N1/N2 Winelands Project and the Moloto Road Strategic Infrastructure Project.
SANRAL executive engineer, Louw Kannemeyer, explained that the majority of SANRAL’s key capacity expansion projects were planned to occur through toll financing, but as this was no longer possible, SANRAL required funding from other sources.
Kannemeyer added that 76% of South Africa’s paved road network was older than its 20-year design life and needed major capex investment. While SANRAL’s total budget requirement to sustain the country’s 750 000km road network in 2018 was calculated to be R116 billion, the agency was only allocated R52 billion or 44.5% of this from treasury in 2017/18.
He said state capture had resulted in the private sector withholding loans meant for road infrastructure, even though SANRAL was in no way linked to the Gupta family or the Bosasa scandal.
Transport engineer and SARF member, Peter Copley, gave a historical overview of the cost of fuel in South Africa since 1980. According to Copley, the price of fuel at the pump in rand terms has increased roughly 23% annually since 1976.
He said data compiled by trade union Solidarity indicated that the petrol price had in fact doubled every six and a half years since the 1980s and, should this trend continue, would cost R28.32 per litre by mid 2020.
While South Africa’s fuel price is currently the 19 highest in the world, the country ranks 56th globally in terms of affordability i.e. the percentage of a day’s wages needed to buy a litre of fuel – and 60th in the world in terms of the percentage of personal income spent each year filling up.
Furthermore, while the total vehicle parc in South Africa increased 37% between 2007 and 2018, government collected 3.3% less revenue from the fuel levy last year than it did in 2007, due to vast improvements in vehicle fuel efficiency.
Copley said the South African economy had shrunk 29% between 2011 and 2016 as the country moved away from market-friendly economic policies.
Coenie Vermaak, CEO of Electronic Toll Collection (ETC), cited the 2018 INRIX Global Survey to quantify the cost of road congestion in South Africa. The survey indicates that 162 hours, 143 hours and 119 hours are lost annually to congestion in Cape Town, Pretoria and Johannesburg respectively.
He said SANRAL’s Economic Impact Study, conducted by the UCT School of Business in 2013, showed that the benefit-cost ratio of the Gauteng Freeway Improvement Project (GFIP) was 8,4. In other words, for every rand spent on the project, society benefits by R8.40. The study also shows that GFIP has an economic internal rate of return of 37%.
Vermaak reminded the audience that the GFIP was estimated to increase national GDP by over R207 billion by 2030. Vermaak explained that, without the GFIP upgrades, the cost of a morning peak hour would have cost motorists an additional R9.51 per trip in 2018.
He concluded by saying the GFIP provides meaningful out-of-pocket savings of R10.90 per trip and was economically efficient. Total toll revenue was also very small compared to provincial GDP and household disposable income in Gauteng, he argued.
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