By Quinton de Villiers
The extent of the failure of the “user pays” model that was adopted to finance the Gauteng Freeway Improvement Project, or “G-FIP, should be cause of concern for most businesses that rely on a fully-functioning road network.
According to the South African National Roads Agency Limited, or “SANRAL”, only 30% of “e-Toll” invoices have been paid over a 24-month period. More than 1,3-billion of the 1,8 billion invoices that were issued in the past 24 months were unpaid. You will recall that the amount owed by non-registered “e-Tolls” already stood at a whopping R7,2-billion by March 2016.
The latest news reports suggest that SANRAL has acknowledged that the “e-Toll” concept is a failure and is now backing a different funding model, namely financing the huge cost of upgrading the road infrastructure through fuel levies. This will make it easier to collect outstanding debt, compared to the “e-Tag” system.
Interestingly, the road agency was always opposed to financing the build from a fuel levy, citing that it was a regressive form of taxation that would impact on the poor demographic of the country. This is considering that busses and taxis were always exempt from the “e-Toll” model.
It also argued that the “e-Tag” concept was intended to promote densification in the province by encouraging Gauteng road users to move closer to their places of employment.
Conversely, the agency pointed out that a fuel levy model would have no real impact on addressing urban sprawl as the entire nation would then shoulder the cost of the build that really only benefits Gauteng road users.
Admittedly, urban sprawl is a major challenge in the country that needs to be addressed, considering the large part it plays in contributing towards the very high level of traffic congestion in South Africa. It is also a major contributor towards high transport costs in the country.
Many, therefore, argue that the money spent on the G-FIP would have better spent building and operating efficient public transport systems, providing Gauteng road users with a real alternative to using their own vehicles.
While road tolling and similar forms of “user pays” models have been successfully adopted by international countries, it is important to bear in mind that they also have effective public transport systems. Those who prefer to drive motor vehicles on strategic road corridors are, therefore, more than willing to pay for a “premium” service.
The “pros’’ and “cons” of the various financing models for G-FIP have been widely debated by experts, including leading economists, and both sides, namely civil society and government, have held their ground over the years.
Unfortunately, this extended delay in finding a workable solution for financing large and essential “greenfield” road infrastructure has had a far-reaching impact on the roll-out of the next two phases of the G-FIP. In fact, we are now at the point where any proposed large toll road project is met with fierce resistance from the South African public. This is despite their importance and urgency.
Prior to the debacle, SANRAL was hailed as one of the most efficient state-owned agencies, employing world-class road engineers. It was also considered an innovator, demonstrated by the quality of the national road network, including the world-class infrastructure that makes up the first phase of the G-FIP.
However, it seems that the custodian of the country’s national road network is now starting to buckle under the pressure of the collapse of the “user pays” principle. This is despite denying claims made in many media outlets that it had written off R3,6-billion in unclaimed debts over the past three years. In the 2015/2016 financial year, it wrote off R92-million.
Also bear in mind its extended mandate by government. The agency also now oversees the maintenance and operation of strategic provincial corridors, in addition to the important national corridors.
As a business that has its roots in the country’s vast road infrastructure, Bridgewater Logistics keeps a close watch on SANRAL and its infrastructure development programmes, especially those G-FIP projects that are closely associated with the “Aerotropolis” development.
We are based in the heart of this ambitious public and private sector project that is in the process of developing a state-of-the-art cargo-related industry around OR. Tambo International Airport.
Unfortunately, its full-scale roll-out is closely connected to an efficient Gauteng road network. Delays in implementing the second and third phases of the project are bound to negatively impact on the timelines of an important initiative that promises to stimulate economic growth.
There are a host of other toll road projects that have also been scuppered, despite their close connection to important transport and logistics infrastructure projects enshrined in the National Development Plan.
Another major concern for the Bridgewater Logistics’ team is the already-high congestion levels on the upgraded Gauteng national road network. This is despite the current worrying state of the economy.
Any upturn in economic activity, which will also directly influence vehicle sales, will, therefore, have a profound negative impact on the already-high levels of traffic on these important provincial routes.
In 2016, the upgraded Gauteng road network catered to as many as 1,49 million vehicle trips a day and, according to a survey released by TomTom earlier this year, the G-FIP played an immense part in alleviating some of the traffic congestion in Johannesburg. This is in addition to other important interventions, including the Gautrain Rapid Rail Link.
In 2015, the City of Johannesburg noted that the cost of congestion to the South African economy was more than a R1-billion, while Johannesburg accounted for the highest loss with more than 1,5 million vehicles registered across the metropolitan.
Real attempts to introduce alternative forms of mobility in Johannesburg and heavily-congested Sandton have not been as successful as initially intended. Here, I am referring to the cycling lanes and the Bus Rapid Transit systems.
South Africans are still largely using their own vehicles to commute, while mini bus taxis remain a more efficient and versatile means of public transport.
I do believe that it is time to truly try and find a solution to the toll-road saga, considering the need for urgent investment in road infrastructure, the lifeblood of our economy. Bearing in mind the length of time that it takes to drive projects of this magnitude from the conceptualisation phases through to a “shovel ready” state, it may already be too late. I am not even taking into consideration extended construction periods, as well as inevitable delays to the construction works programmes.
Can we really afford for SANRAL to fall into a state similar to other public sector bodies that are tasked with administering our water and energy requirements?
Quinton de Villiers is the founder and managing director of Bridgewater Logistics with a long and impressive track-record in African logistics and security. Follow Quinton at #InTheFastLane for more insights and expert commentary on African transport and logistics.
