Cracks in Sanral's freeway support
Pressure on the South African National Roads Agency (Sanral) continues unabated, with the Gauteng ANC the latest voice to join the call to scrap e-tolls.
With opposition to e-tolls refusing to die, questions remain over how the agency will meet its financial obligations for the Gauteng Freeway Improvement Project (GFIP), despite continued public support from the national government.
The ruling party’s provincial arm proposed a nominal increase in the national fuel levy and increased vehicle licence fees for Gauteng drivers as a way to end e-tolls and allow Sanral to address financing.
This was put forward in its submission to the Gauteng provincial government’s review panel on e-tolls on Tuesday.
The idea broadly echoes the solutions proposed by a fellow e-toll critic, the Opposition To Urban Tolling Alliance (Outa), in its submission to the review panel.
Outa alternatively proposed that the money to pay the R20-billion debt on the freeway project should come through the fiscus from revenue raised by the fuel levy. Since completion of the project in 2011-2012, the levy had increased by 55c a litre for fuel, earning an additional R12-billion for the state, it said in its submission.
The increase of the levy by an estimated 9c would be enough to raise the R1.9-billion needed to repay both the capital and interest payments on the project each year, it said.
The fuel levy is slightly less than R2.25 a litre for petrol and R2.10 a litre for diesel.
According to the South African Revenue Service’s annual report for 2013-2014, revenue from the fuel levy increased from slightly less than R24.9-billion in the 2008-2009 financial year to R43.7-billion in 2013-2014.
Outa also proposed combining an increase in the national fuel levy with an inland fuel levy to load some of the charges on Gauteng motorists. It estimated that a national fuel levy increase of 5c a litre and an inland fuel levy of 7c a litre could answer the problems of funding.
Sanral’s R2.7-billion loss
Despite the national government’s public support for e-tolling and the user-pays principal, e-tolling bedevils Sanral, as is evident in its latest annual results. After deducting financing costs, the agency recorded a R2.7-billion loss this year.
In a press release issued last week, the agency’s chief financial officer, Inge Mulder, said the loss was “occasioned largely by delays in the implementation of the GFIP, which resulted in increase in finance charges and loss of revenue”.
The treasury has maintained that ring-fencing tax revenue for specific purposes is both inefficient and reduces accountability and transparency over government finances.
Similarly, taxing all motorists to pay for Gauteng’s roads is deemed unfair. The user pays principle that underpins e-tolling is viewed as equitable by the government and Sanral.
Mike Schussler, of Economists.co.za, said it was not fair to charge other road users for the upkeep of Gauteng’s roads.
But, when it came to financing the maintenance and upgrading of national roads, it made sense to use the revenue generated by the fuel levy, he said.
Schussler estimated that R150-billion was needed to fix the country’s road infrastructure. Increases in the fuel levy and vehicle licence fees could be used to fund this cost.
But broader transportation challenges, including the funding of better public transport, such bus and train infrastructure, also needed to be addressed, he said.
The chairperson of Outa, Wayne Duvenage, said that, in light of continuing public opposition to e-tolls, the state was facing a “crisis of legitimacy”.
The ongoing poor levels of compliance with e-tolling since it started in December last year was evidence of this.
In July, the department of transport revealed in a response to questions from the Democratic Alliance that outstanding e-toll payments overdue for less than 90 days stood at almost R1-billion on May 31 this year.
A further R156.6-million in payments overdue by 90 days was still outstanding.
The introduction of the Transport Laws and Related Matters Amendment Act last year provides Sanral with the legal means to enforce e-tolling.
But earlier this year Transport Minister Dipuo Peters reportedly stepped in to halt the prosecution of noncompliant e-toll users.
Neither Sanral nor the department of transport responded to questions sent to them.