Funding the Gauteng Freeway Improvement Project (GFIP), for which e-tolling was established, should be a national burden and not just Gauteng's, says the Southern African Vehicle Rental and Leasing Association (Savrala).
It strongly opposes the controversial e-tolling system that is set to be implemented next month.
The association says the parties opposing e-tolling are unanimous about the need to consider more seriously the national fuel levy as a more administratively efficient method of both collection and funding.
“Sanral's [SA National Roads Agency's] own research conducted by the Graduate School of Business, in Cape Town, concedes that 'paying for roads through taxes or a dedicated fuel levy is simply cheaper than imposing tolls on a road even if this is through an ORT [open-road tolling] system. The cost of collection is far lower, because it does not incur the cost of the toll collection system'.”
As a benchmark, Savrala points out that the SA Revenue Service's (SARS') cost of revenue collection is just over 1%, unlike the e-toll collection process which is expected to be around 35%.
Gauteng contribution
The association adds that using various reasonable assumptions, Gauteng contributes approximately R260 billion (39%), via SARS, to the central fiscus of government.
“If one assumes that each region gets a proportionate benefit from the national departments, then the next big consideration is the provincial allocations. Including conditional grants of R14.5 billion, Gauteng received a total of approximately R65 billion (18%) during 2010/11 in stark contrast to the estimated R260 billion contributed by the province to SARS.”
Consolidating all revenues, Gauteng Provincial Government is budgeting to spend only R6.2 billion on roads and transport in 2011/12, a far cry from the R9.4 billion spent in 2008/9, adds Savrala.
Fair share
“At the end of the day, the national interest is not served by revenue raised in a province being ring-fenced and kept within that province for its own hospitals, schools, transport, roads, etc. Rather, national projects like GFIP and other national projects under Sanral could be and should be paid nationally via an additional cost allocation from the fuel levy by all road users.”
Savrala says Gauteng residents and road users already contribute both 44% of the total national fuel levy generated and significantly more, at an estimated R260 billion to the central fiscus via SARS.
“Gauteng pays more than its fair share.”
Inconsistent government
The association has also criticised the “subjective” nature of the e-tolling system.
It explains that transport minister Sibusiso Ndebele launched the S'hamba Sonke - “Moving Together” Programme - in April and R22 billion was allocated to it in last year's medium-term expenditure framework cycle.
It was described as “the Department of Transport launching a new roads upgrade and maintenance initiative to fix and upgrade the entire secondary roads network of SA”, according to Savrala.
Unlike the S'hamba Sonke Programme, the GFIP programme will follow the user-pay principle for e-tolling to repay the loans, and will be used for future operation and maintenance of these roads.
“This highlights the inconsistency and almost subjective nature of the 'user-pay' principle, which was undermined further by the exemption of certain minibus taxis and commuter buses by the minister of transport late last year.”
Transport puzzle
Gauteng roads users were advised they will have to finance the costs for both the estimated R23 billion construction costs for the GFIP Phase 1A and a further R6 billion over five years for the administration of the e-toll system.
“Under the veil of public-private partnerships, the plans to implement a national ORT structure seems like another finance scheme to help government source much-needed funds, despite the fact that road users already pay for vehicle licence fees, drivers' licence fees, multiple fuel levies (including the RAF and Transnet fuel pipeline) and carbon taxes, excluding the personal income tax contributions which go to the central fiscus, to fund the operation of government which, many would argue, includes all roads.”
Savrala says the majority of the opposition to e-tolling, which includes business, labour, opposition politicians and some government officials, have called for the total suspension of the e-toll project.
“All acknowledge the need for significant road improvements, as one tool to deal with modern day city traffic congestion; however, the funding of such projects remains the key missing piece to the national transport puzzle.”
Share
