As government and the SA National Roads Agency (Sanral) market the imminent implementation of the Gauteng open road tolling project, the Opposition to Urban Tolling Alliance (Outa) continues to lobby against the move - with its latest argument being that SA can simply not afford it.
Following a statement by the National Credit Regulator (NCR) reflecting the dire state of local consumers' debt this week, Outa says South Africans' high debt levels are yet more proof that e-tolling would be "the worst possible option to pay for new roads".
Outa chairman Wayne Duvenage this morning echoed the concerns raised by the NCR, citing the regulator: "In the past three months, almost 200 000 additional citizens have been classified as having impaired credit records, bringing the total number to 9.53 million."
Duvenage says thousands of road users in Gauteng will not be able to find another few hundred rand after tax to pay e-tolls.
The NCR recently also revealed that almost half of all credit-active South Africans are in some kind of financial difficulty. Duvenage has accused Sanral of ignoring this reality.
"Not only are the overwhelming majority of South Africans opposed to e-tolling for various valid reasons, many living in Gauteng will not be able to afford it and will simply not pay."
Clashing concepts
Duvenage further refers to government's recent review of state-owned entities, saying it emphasises that the user pays principle is not appropriate for funding of social infrastructure, including roads.
ITWeb recently reported on discrepancies around what the government plans to implement in terms of e-tolling and a report from its Presidential Review Committee on state-owned entities.
While the report's recommendations will be further investigated before the state implements all or any of them, they are currently at odds with Sanral's unyielding position that the user pays principle is the only way to go.
Released by minister in the presidency Collins Chabane on 28 May, the report recommends that "funding of social infrastructure, including roads, should have less reliance on the 'user pays' principle, and more on taxes".
Duvenage reiterates that government and Sanral should acknowledge what he says is "broad opposition" to e-tolling and "revert to funding roads improvement out of the existing fiscus, which is more than adequately complemented by road users through the user pays mechanism of the fuel levy".
Adequate levies?
Outa says Gauteng, SA's commercial hub, benefits citizens through its freeways. Duvenage points out that Gauteng contributes around 40% of the national taxation receipts. "[Gauteng's] citizens have uncomplainingly subsidised roads in other provinces for decades.
"Gauteng's freeways are SA's freeways and Sanral should cease with its weak 'user pays' argument to introduce an extremely costly and inefficient means of funding the freeway upgrade, which handsomely enriches foreign companies."
Duvenage says Outa "strongly believes" no additional levies are needed to fund the Gauteng Freeway Improvement Project (GFIP), or other road upgrades, and says SA's road users are already over-taxed through licences, import duties, carbon taxes, fuel levies and a new tyre tax.
He says, however, should government find itself in a dire situation in which it needed the extra funds from society to pay for Gauteng's freeway upgrade, "a modest fuel levy increase of 10c a litre" would cover this.
"[This] would cost the average motorist less than R15 per month - compared [with] the much higher costs that tolling is expected to have on not only the average Gauteng motorist, but the entire nation's consumer base, which will be impacted by the resultant inflationary forces, thereby further exacerbating the growing citizen liquidity problem."
Sanral spokesperson Vusi Mona says it is "interesting" that Outa promotes the fuel levy as a funding option, and argues that people cannot afford e-tolls. "[But the alliance] finds it acceptable that people that do not make use of the road and do not derive a benefit from it, should pay for it."
Mona points out that, since the first announcement of the toll tariffs in February 2011, government has twice reduced these. "These concessions have been made possible by the increase of the debt repayment period, as well as the R5.7 billion contribution from the national revenue fund."
He says government's tariff strategy makes provision for discounts - including frequent user and time of day discount. "[And tariffs are] capped monthly for users that are registered with an e-tag."
Mona says Sanral has established the "actual costs" for road users by means of number plate recognition. "78.5% of road users will pay less than R100, 12.8% will pay between R101 and R200, and 5% will pay between R201 and R300 per month."
Economic argument
Mona further says Sanral and the Department of Transport (DOT) have fully investigated alternative funding models.
He says Sanral spent an "inordinate amount of time" investigating the best method to fund the GFIP. "While doing this we took into account the fact that the funding model we chose had to be equitable and sustainable. We could not put a model in place that could - in the future - compromise the project."
Mona says there are only two ways in which road improvement in SA can be funded under legislation - either through an allocation from the fiscus, or road tolling. "The fuel levy is not ring-fenced but goes into government's central revenue."
The fact remains, says Mona, e-tolling is "much more efficient and cost-effective than a fuel-levy, which is unsustainable and contrary to the promotion of efficient government spending".
Mona cites a recent report by the US's Reason Foundation, which he says shows a fuel levy to have several disadvantages, including: "It does not keep up with inflation; increased fuel prices plus a lagging economy result in slower traffic volume growth; and hybrid and more fuel-efficient vehicles mean lower fuel sales."
Money collected from tolling cannot, by law, go to anything else except to costs linked directly with the tolled road, in this case the GFIP, says Mona. "The same cannot be said about the fuel levy as the money collected here is not ring-fenced."
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