Electronic Toll Collection company (ETC) CEO, Coenie Vermaak, calls on new Minister of Transport, Fikile Mbalula, to carefully consider the implications of scrapping e-tolling in Gauteng, and the drastic impact this could have on new road infrastructure in the province and for South Africa.
The transport industry weighs in
Vermaak believes that Minister Mbalula could consider several different viewpoints on the e-tolling matter, including those of the professional transport industry, its working groups and independent economists, and not rely solely on the perspectives of activists and civil society groups.
“For the past year ETC has been investing and hosting focussed working groups in partnership with the Transport Forum to understand and unpack the transport industry’s and academia’s opinions and views on road funding in South Africa. During these sessions it became clear that when it comes to financing roads the user pays system is the best solution for the province going forward.” says Vermaak.
Cash raised by the fuel levy for roads, which is often touted as the solution to road funding, was dismissed by the Working Groups as an unviable solution. It is not earmarked for roads as it is collected and distributed via the normal budget process and as a result, are not solely used for infrastructure development and maintenance. A fuel levy also disadvantages the poorer communities with less efficient vehicles.
The negative effects of scrapping e-tolls must be considered
The first phase of the multiphase Gauteng Freeway Improvement Project (GFIP) comprised of an initial investment of R25-billion in the e-tolling system. Due to the public outcry against e-tolling, SANRAL currently has an approximate R47-billion debt as a result of the low compliance rate of Gauteng road users.
Scrapping the e-tolling system would immediately trigger the settling of this enlarged bill, as it is legitimate debt that must be paid to SANRAL bond holders. Furthermore, last week Rating Agency Moody’s already warned that, against the backdrop of a low growth environment, the new administration will have to face the challenging task of arresting and, ultimately, reversing the country’s rising debt trend. It adds that its ability to do so, through some combination of higher growth and lower deficits, will determine the evolution of South Africa’s credit profile – and rating – over the coming years.
The GFIP was designed and implemented to primarily reduce travel times on Gauteng’s busiest freeways. Independent research by TomTom South Africa shows that average travel times were reduced following the completion of the first phase of GFIP.
The R47bn debt also does not consider the cost of congestion, increased vehicle emissions or the impact on the overall quality of life in the province.
Loss of jobs and the opportunity to create more
ETC cautions that ending e-tolling would result in the loss of 1,200 direct jobs at ETC, as well as the loss of 1, 000 indirect jobs from a number of its suppliers. Worse still, it would mean that 38 000 potential indirect jobs that would be created during phases two and three of GFIP would fail to be realised.
“There is no doubt that the e-toll system has faced many challenges with compliance levels remaining low due to the continued public outcry against how the system was implemented. But there are many more serious consequences that will negatively impact us all if Minister Mbalula heeds the irresponsible call from organisations like OUTA to scrap the e-toll system. Groups like OUTA, who were part of the Working Groups, brought no alternative solution to the road funding debate.” says Vermaak.
“Instead of pulling this national asset down we should be proud of the world-class technology and the skills transfer that this project has delivered. We should be focussed on rebuilding Gauteng and driving its economic prosperity, “he concludes.
It’s time to move Gauteng forward
It is ETC’s view that Minister Mbalula should focus his energies on finding fair and equitable road funding solutions that is aligned to government policy. Vermaak is of the view that the new Minister can take proactive steps to move the province forward as the economic powerhouse in South Africa.
“World class roads form the backbone of this province’s economy and we need new roads as well as to maintain our existing road infrastructure,” Vermaak continues. “This requires appropriate funding, which we believe should be derived from the user-pays principle. This principle is completely aligned to government’s objective of supporting public transport over private transport and ensuring equity in the allocation of its resources. If we don’t embrace technology and solutionist thinking, the status quo of e-tolling will remain and the debt burden will continue to increase,” he concludes.