For whom the tolls erode

Gauteng commuters have expressed outrage at the new electronic tolling system that will be imposed on freeway users in June.

Experts say South Africans have been paying for the building and maintenance of roads all along.

“I think that your average road consumer has suddenly become aware of the fact that there are costs to building and maintaining roads,” Tony Twine, Econometrix economist, said.

Before 1991 there had been a tax of 4c a litre on petrol or diesel. Then the government consolidated the entire set tax into a composite fuel levy.
“Although this ring-fenced revenue pool disappeared from public view, it was still there,” Twine said. In 1994 road-building priorities changed and funds that were usually used to service white areas also had to improve roads in former homelands.

Now 185km of Gauteng’s highways will be tolled by the South African National Road Agency Limited (Sanral), using overhead gantries. Standard light vehicles will pay 66c a kilometre but discounts will be built into the fee structure.

“Now, with the imminence of the tolling, consumers have gone into panic mode,” Twine said, “—and the outrage comes from the enormity of the increase.” He said that for those who qualified for the first level of discount, 50km on a tolled freeway would be equivalent to raising the price of diesel or petrol by R5 a litre. People felt that they were now “paying for something which is theoretically free but it never was free. It is just a tax iceberg which was under water but is now in the open for everyone to see.”

According to Sanral, the Gauteng Freeway Improvement Project is expected to generate R300-million a month. The money collected from the tolls will not go into the fiscus but will pay the debts incurred by the project and be used to maintain the toll-route roads.

Sanral Act
Nazir Alli, the Sanral chief executive, said: “Before people think we are making a profit we have to repay loans and we have raised bonds and have to pay interest on that. None of it is going into the fiscus. Toll-road money must be spent on toll roads. It is stated in our [the Sanral] Act.”

Asked if road users would now be taxed for something that already existed, Alli disagreed: “Improvements didn’t exist before, four or five lanes didn’t exist before.” He also cited maintenance and future expenditure as uses for the tax.

Tony Leiman, associate professor of economics at the University of Cape Town, said the projected figure of R300-million was surprisingly low. They were some “of the most busily travelled roads in South Africa and, at 66c a kilometre, that’s a lot of money.”

Leiman said a fixed tax was regressive as someone driving an old car would pay the same as “the bloated plutocrat in his four-wheel drive”. But, he added, the amount of money spent on the roads was far lower than it should be: “South Africa’s roads are diabolical and Sanral is failing in its duties. The country’s roads, if not tolled, are weakening rapidly.”

Gary Ronald, the Automobile Association’s public affairs manager, said the AA was against the idea. He did not dispute that the highway network needed to be upgraded but “the whole issue with this particular collection of tolls goes further than just the road”.

Sanral, he said, had an absolute focus on upgrading the roads and being able to pay for such infrastructure. But tolling should be seen as a last resort when looking to fund the building of roads. “The unintended consequences are that anything routed through Gauteng will take on extra costs. A man in Vereeniging buying a block of cheese will be paying extra. That is the economic implication.”

Increased costs
Ronald said that increased transport costs for commuters could mean, for example, that travelling to Pretoria to work every day might no longer be economically viable, or that a family would have to go without two or three meals a month to absorb the costs. “I don’t want to support a system which makes the poor poorer,” he said.

Patricia Pillay, the head of the South African retail association unit within the Consumer Goods Council of South Africa, said that the consumer goods and services industry was seriously concerned about the implications of the project and believed that retailers, manufacturers, suppliers and logistics companies were likely to be worst hit.

“Ordinary road users will have to budget a minimum R1 000 or so each month with the new e-toll tariffs. Businesses will have to factor millions into their budgets for the cost of toll fees.” Pillay said that at a later stage these costs might be passed on to the customer.

She was also concerned about the small and medium enterprises (SMMEs) that were already struggling to keep their heads above water. “This is now adding further strain which could possibly result in these small businesses shutting their doors. This to me is totally contradictory of the president’s intention of assisting SMMEs as outlined in his State of the Nation address [last week].”

Discussions on the tariffs will be held at a summit next month and Ronald said he hoped sanity would prevail. He noted there was talk of boycotts on Twitter and Facebook—“I’m getting the sense there is going to be some sort of descent.” The wild card, he said, was that this is an election year.

Lisa Steyn

Lisa Steyn

Lisa Steyn is a business reporter at the Mail & Guardian. She holds a master's degree in journalism and media studies from Wits University. Her areas of interest range from energy and mining to financial services and telecommunication. When she is not poring over annual reports, Lisa can usually be found pottering about the kitchen. Read more from Lisa Steyn

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