'E-tolling is progressive'

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The controversial Gauteng e-tolling system is actually progressive as opposed to an increase on the fuel levy, which would be regressive, says economic analyst Roelof Botha, adjunct faculty at the Gordon Institute of Business Science, at the University of Pretoria.

Botha's independent study has yet to be subject to peer review but Botha says the highest income earning quintile in Gauteng will be responsible for more than 94% of total toll fees paid.

"Combined with the second-highest income earning quintile, this share rises to more than 99%. Together with government's decision to exempt public transport operators from e-tolling, this translates into a highly-progressive nature of user charges."

Poor poorer

Several parties, including labour, opposition parties and citizens, have called for an increase on the fuel levy to fund the Gauteng Freeway Improvement Project (GFIP) as opposed to e-tolling, which will require millions of rands per month for operation fees.

However, Botha says increasing the fuel levy will translate into funding from the country's general revenue pool and may increase the price of petrol by more than R1 per litre, which would have an inflationary effect on the economy. It will also jeopardise the fiscal credit ratings.

He explains that this would be regressive as the poor will be made poorer, whereas with e-tolling it is the rich that will be made poorer. "Poor people are not complaining about e-tolling, because it doesn't affect them."

The Congress of SA Trade Unions has repeatedly called for the complete abandonment of the system as it will harm the country's lower income earners as food prices will go up due to increased transport costs.

Botha says there is the possibility that food prices and the like will increase, but the inflation effect of a fuel price increase will be larger than any possible inflation effect of e-tolling.

Precious time

Botha also says National Treasury is not keen to pick up the bill for GFIP. "If e-tolling is abandoned then public debt will be under even more pressure within the recession period."

He explains that if long term bond yield were to increase by 1%, then the total additional interest to be increased on entire government debt will be more than R12.7 billion, annually.

The average toll fee on which the study was based is 39c/km. The analysis was also based on productivity gained from time saved during a journey and not on stress levels and other benefits, according to Botha.

"We conservatively assume that only 15% of the time saved would be translated into productive time as this depends on the profession. Not all professions allow for people to clock in when they can and be paid according to that time."

Government limbo

Botha says the e-tolling system is a flagship project, especially in terms of raising SA's international competitiveness and so the Department of Transport should have played a stronger leadership role in making the benefits of GFIP public. "I'm surprised. It's as if they're in limbo."

He adds that on average if road users were to take time savings per year because of congestion relief and translate 15% of that time saving into productive work then net benefit for every R1 of toll feels paid will be R8.84.

"Assuming that 15% of the commuting time saved as a result of the GFIP will be translated into productive earnings, an annual net benefit of more than R2.1 billion accrues to the South African economy.

Enormous costs

The Democratic Alliance strongly disagrees with Botha, according to Gauteng transport spokesperson Neil Campbell. "Botha's claim that most poor people will not have to pay tolls as they use public transport is not accurate as not all taxis and busses will travel toll free, but rather only those with 'licences' and on approved routes."

Campbell adds that every item transported along the toll roads will increase in price, because hauliers will have no option but to increase their prices for transporting goods. This will impact on every resident in Gauteng, as the price of every item transported, including food, will rise.

"Every home owner will also have their rates increased because of additional municipal road maintenance required due to increased pressure on these roads by drivers avoiding the toll roads. Botha also disregards the enormous toll collection costs that will be saved with a simple fuel levy."

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