Tag Archive | e-tolling

E-tolling: OUTA takes it to Parliament

Committee unsympathetic to OUTA…

sent to clients 20 February…. Tough words were used in Parliament when the Opposition to Urban Tolling Alliance (OUTA, now called Organisation Uniting against Tax Abuse) presented its views on e-tolling twayne duvenageo the Parliamentary Portfolio Committee on Transport, particularly of the idea to fund SANRAL of of the fuel levy.  In the end Wayne Duvenage, OUTA Chairperson, was told by the Committee that the only way forward was that OUTA and the SA National Road Agency (SANRAL) get together and negotiate a compromise.

The view of ANC members was perhaps more clearly demonstrated by one MP who stated that the user-pays system had to be retained, since the poor could not afford the costs of freeway development being absorbed into the fuel levy, as was proposed by OUTA.

She explained quite simply that if you could afford a car licence and petrol in the first place, one must pay for e-tolls, otherwise the e-tolling would be added to the price of sugar and soap through the fuel levy because of distribution costs. At the time, members were not aware of the forthcoming fuel levy increase in the Budget.

No either, or…

Whilst ANC members agreed with OUTA that the Gauteng e-toll scheme as currently imposed had not been a great success, it was considered unlikely that Parliament would even consider halting the programme as such and would not encourage a switch to levy funding. A way of making e-tolling a success had to be found, they said.

The main platform of OUTA’s complaints was the issue of poor public engagement and an “arrogant imposition” of the programme which had been badly thought out, they said.    Wayne Duvenage claimed that the argument that an increase in road levies would hurt the poor was hypocritical since government has themselves had increased the fuel levy by 92% over 8 years.

Free ride

OUTA held that e-tolls amounted to extortion and the fact that none of the 46,000 exempt Gauteng taxis had fitted e-tags suggested that the scheme was being shunned, even when free.

nazir alliThey reminded MPs that the High Court had set aside the interdict granted to SANRAL that further discussions had to take place before e-tolling commenced on the basis that SANRAL could start but a door had to be left open for a collateral challenge from society. This was now the case.

OUTA complained also that and that there were no adequate alternatives to easing congestion as required and that the Competition Commission had found the relevant construction companies guilty of collusion.     Yet earlier, SANRAL had claimed that there was nothing untoward about construction costs before the Commission’s findings. MPs said they wanted to know more about this and there would be a follow up by Parliament.

Compliant motorists double penalised

Currently, Duvenage said, compliance stood at about 9%, which was vastly unfair to those paying. (This meeting took place before it was discovered that in all likelihood the remaining 91% had the slate of outstanding fines wiped clean).

Duvenage warned that coupling licence renewals with e-tolling compliance “was an invitation for public resistance” e-toll gantryand not encouraged by OUTA since it would destroy the basis of the AARTO Act and the foundation of road governance.

OUTA called for the e-toll principle be halted in practice overall and that an “exit strategy” be planned for existing contracts.      OUTA was reminded by Chairperson Ramakatla that the Commission of Enquiry into e-tolling had not advised that the user-pay principle be discarded. The response from OUTA to the chair that it was not the right tax mechanism to be used and was also unfair. Users were already paying for road use through fuel levies and taxes.

Talking only route

M de Freitas (DA) said it seemed at the time likely that Gauteng as a Province would oppose e-tolling and to head off the licence fees confrontation, OUTA and SANRAL had to appear at the same meeting and talk of compromise to avoid this happening. Such a confrontation would be disastrous for the country at a difficult time.

OUTA defended themselves by saying that they did not support anarchy and had not stated ever that they were in agreement with e-tolling, their argument being that it was not the right mechanism at all, so it would difficult to find a compromise on e-tolling as a programme.

OUTA said the system used was not a “boom down” system but a straight drive through and “the long-distance model had to be separated from the e-tolling model.”
Wayne Duvenage added he never went as far as Mpumalanga but the e-toll system charged him for freeway building in that part of the world. However, he said, he was already paying for un-tolled Mpumalanga roads through his normal tax, in fact any roads.

Fuel levy out of equation

Chairperson Ramakatla told OUTA that although agreement had been expressed that people had to pay for road use, the OUTA response seemed to be saying something else and their argument that there had to be sole reliance on the fuel levy was not acceptable.

If there was something wrong with the e-tolling system in their view they should make suggestions how to get it right but the fuel levy option was clearly out.

Whilst OUTA had submitted that there was a lack of consultation in 2007, and this was probably true, he said, the lack of consultation was later corrected and that argument no longer applied and this should be borne in mind if a resolution to the problem was to be found by stakeholders.

He said that Parliament would decide on its view on the e-toll issue in further debate.

Previous articles on category subject
Bumpy road for e-tolling Bill continues – ParlyReportSA
Transport Laws Bill on e-tolling amended – ParlyReport
Parliament says Transport Bill on e-tolling will go forward
Transport Laws Bill enabling e-tolling tabled – …

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SANRAL gets more out of transport budget

SANRAL part of much bigger picture…..

roadsPrior to Deputy President Ramaphosa’s defence in the National Assembly of the-tolling system with its decreased tariffs , Minister of Transport, Dipuo Peters, told Parliament earlier in her budget vote speech that her department had a budget of R53.7bn for 2015/16, of which 12.5bn would go to South Africa Roads National Agency (SANRAL) – the total budget of R53.7bn being 6% more than last year’s budget.

Speaking at a media briefing prior to her budget vote, the Minister said that the projects administered by the department of transport (DoT) are run through thirteen different transport entities, to where 96.7% of the budget was appropriated and which included mainly provinces and municipalities.

Taxis moving major bulk of commuters 

dipou petersMinister Peters said, “Taxis remain moving 68% of the country’s 5.4 million passengers on a daily basis and contribute immensely to our economy, the taxi remaining the most important part of the public transport system.” Consequently it was her intention, she said, to review the taxi recapitalisation programme to bring about more affordability.

The Minister further stated that with the increase of vehicle transport on roads, DoT was altering its programme of expansion of the road network, doubling the capital available for the upgrade and expansion of provincial and local roads. In fact, the number of vehicles on South Africa’s roads had increased from 5-million in 1994 to over 11-million in 2014.

Nothing much since 1986

It was to be noted, the minister said, that the R1.1bn Moloto road to the north of Pretoria was a priority in view of the number of fatal accidents. “Hardly any significant new highways have been built since 1986, except for those that were constructed as part of the toll projects,” she said.

The additional funding for SANRAL was in respect of roads being added to the SANRAL network, especially in the provinces, which had to be upgraded if tolling was to be introduced. “All this work cannot be funded from the fiscus alone in the form of increased appropriations”.

Minister Peters said that more goods had to be transported by rail rather than by road and the number of vehicle accidents in the country brought down. “This move will equally unlock more economic potential and job creation. It will also help decrease congestion by road freight and with them transporting so much in the way of dangerous and heavy goods.”

Good money after bad?

Opposition shadow transport minister, Manny de Freitas, in reply, pointed out that SANRAL was well short of the R250m a month it said it needed in its original targeting – in fact he had heard that SANRAL had only reached R120m per month income, probably resulted from an estimated 23% of users resisting or not paying collections, in Gauteng.

He queried, as had the High Court he said, SANRAL’s tolling model and hoped the R12.5bn was not a subsidy to make up for the Gauteng impasse, especially as SANRAL seem determined to toll part of the Winelands route in Western Province.

Other articles in this category or as background
http://parlyreportsa.co.za/finance-economic/minister-comments-taxis-e-tolls-road-rail/
http://parlyreportsa.co.za/trade-industry/national-road-traffic-bill-passed-legally/
http://parlyreportsa.co.za/cabinetpresidential/e-tolling-transport-laws-bill-held-over/
http://parlyreportsa.co.za/uncategorized/e-tolling-becomes-a-financial-mess/

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Transport ministry studies taxi, e-tolls and rail

Minister briefs on transport…..

dipou petersTransport minister, Dipuo Peters, told parliamentarians during the annual budget vote debate during a transport portfolio committee meeting that she had to re-look at the failing taxi recapitalisation programme; encourage Gauteng road users to pay e-tolls by announcing incentives; tackle urgently the upgrading of roads; and consider methods to restore freight rail transport as a the primary carrier for the Durban/Gauteng corridor.

The minister said that she recognised that the taxi industry played a critical role in the South African economy by providing 300,000 jobs and contributing an estimated,R40bn to the economy, she said.

Upgrade of taxi industry

The need to modernise the taxi industry still remained as an urgent issue, she continued, and also there was a need to further deploytaxi industry  taxi drivers to other industries, including the bus rapid transit system, possibly aviation and to ports and shipping.

She attributed the slow pace of the recapitalisation programme to the fact that heavily indebted taxi operators chose to remain with old taxis rather enter the process of recapitalisation.   Also, the scrapping allowance had been overtaken by rising prices of new taxis. The entire system needed a priority overhaul, she said, since the safety of the South African passengers was at risk.

Later it became evident during debate that the taxi recapitalisation programme had for all intents and purposes stalled, since only 2,752 vehicles had been scrapped in some eighteen months.

Easing off the pressure

On the subject of e-tolls, Minister Peters said that in order to “make things easier” for the public, DoT was providing an extension of the payment period from seven days to fifty one days; a 48% e-tag-holder discount; 60% discount on the alternative tariff if a non registered user paid within the same 51 days; time-of-day discounts applicable in certain cases; frequent user discounts and a cap on class A2/light vehicles

The minister was asked if Sanral intended to continue its “prosecution and possibly criminalisation of some one-million people who have not paid their e-toll bills”. She replied that she hoped the new arrangements would assist in reducing the financial burden for motorists. She urged Gauteng users of tolled roads to “accept their responsibilities in the interests of better roads for South Africa if SANRAL were to perform their duties and meet their targets.”

She asked MPs to take the lead and say publicly that they were.

Breakdown

The total DoT budget was R48.7bn. for 2014/15, rising to R53.9bn. in 2015/16. This amount included allocations to provinces, municipalities, state owned companies and agencies. Road transport received 43.7%, rail transport had 34.9% and public transport 21%, whilst civil aviation and maritime each received 0.4%. DoT was responsible for transfer of payments and conditional grants to provinces and municipalities.

On the issue of road conditions nationally, DOT heads stated that only 10% of roads were in “poor” condition and the department indicated that it would provide R21.9bn in critical support to SANRAL who were the roads delivery agent for DoT.

Commuter rail focus

metrorailOn rail issues and rail transport, Mawethu Vilana, acting DG for DoT, said passenger rail accounted for a large slice of the commuter transport used by the national work force, R15bn being allocated to the railways accordingly.    He said DoT was trying to reduce the cost and to improve the services of Metrorail, as well as accelerate implementation of integrating rail services with other transport services.   A White Paper would be issued on rail integration issues.

Integration of systems

This was enlarged upon by Mathabatha Mokonyama, DG of public transport, who said the focus was on accelerating integrated transport systems “so as to improve its overall productivity” and DoT would to allocate R81m to the integration process, expected to increase to R84m in 2015/16 and again to R89m in 2016/17.

Mokonyama reconfirmed that whilst rail transport played a major role, DoT had to focus on reducing the cost of public transportcity deep generally and it would also monitor the progress of the Passenger Rail Agency in its objective to restore to the country national rail passenger systems.

He indicated that rail freight transport had to play a larger role in order to compete with road, particularly the Durban/Gauteng corridor and to service industry in Mpumalanga.

Draft White Paper on way

Mokonyama again pointed to the new draft updated White Paper on Transport which was on its way as a framework for public discussion. DoT would also update the Moving South Africa plan and the seven-year old rural transport strategy. This new planning called for further updated legislation.

Minister Peters, in conclusion, conceded under questioning that DoT urgently needed to update scholar transport policies and re-introduce urgency to programmes to reduce road fatalities.

In an odd ending to the debate, when discussing the budget vote on maritime issues, it was said by the DoT maritime services DG that there was a need to establish a maritime shipping sector. The chair promptly asked, “What has happened to the country’s ships?”

The deputy minister of transport, Sindisiwe Chikunga, replied “All our ships were sold on the eve of democracy to make sure that the current government did not participate in the international shipping industry”.

This position was to be reversed, she concluded.

Other articles in this category or as background
http://parlyreportsa.co.za//finance-economic/prasa-says-upgrade-of-rail-transport-will-involve-local-industry/
http://parlyreportsa.co.za//finance-economic/bumpy-road-for-e-tolling-bill-continues/
http://parlyreportsa.co.za//uncategorized/transnet-says-freight-rail-operations-coming-right/
http://parlyreportsa.co.za//energy/transport-subsidies-to-business-are-wrong-says-parliament/

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Was National Road Traffic Bill passed legally?

Query on status of National Road Traffic Bill….

Perhaps a more serious constitutional threat to e-tolling has now emerged than just simply public objection to the new road tax imposed by the National Road Traffic Bill based on information captured on camera mounted on road gantries, to pay for roads development and maintenance in South Africa.

This has emerged as a query on parliamentary procedure of the National Road Traffic Amendment Bill, the legislation passed by Parliament before becoming a necessary amendment to the Act thus allowing e-tolling.

Was Bill a section 76 Bill for provincial debate?

The query comes from the Democratic Alliance as to whether the Bill was correctly “tagged” when it was debated in Parliament and approved. Whilst the Bill was also objected to by COSATU, the DA maintains that the legislation was presented as a section 75 Bill, thus allowing approval by the National Assembly alone with simple concurrence from the NCOP.

The DA maintains that as e-tolling affects all motorists and vehicle operators throughout the country, the Bill should have been “tagged” as a section 76 Bill, which would have meant that the Bill should have been referred to all nine provinces and debated at a local level, provincial mandates for approval being obtained.

The DA is also aware that there is strong objection to e-tolling in the Western Cape where main national highways affect township transport, the winelands industry and tourism.

Purely national or provincial as well?

It is possibly a moot point whether National Road Traffic Amendment Bill is a national issue alone involving the minister of roads having the authority and public finance, by a public tax, to develop roads classified as “national” or whether the consultation process in the passage of the Bill was not correctly followed to allow for consumer opinion.

All would seem a little late however. In any case this, such a major change to legal procedure, would have to go to the Constitutional Court, an expensive process presumably needing to be funded by the main objectors, the Opposition to Urban Tolling Alliance (OUTA).

SANRAL has stated that “investors (in the system of e-tolling) are awaiting information as to their success in recovering the toll income from users, as this will determine whether they invest further or withdraw their current investment”

SANRAL commenced e-tolls, or electronic tolling, in Gauteng province, after a series of delays caused by opposition from road users and trade unions but from revenue so far received has said “although the numbers must still be verified, from the initial indications we are satisfied that we are on track to meet our debt obligations”.

Refer previous articles

http://parlyreportsa.co.za//finance-economic/bumpy-road-for-e-tolling-bill-continues/
http://parlyreportsa.co.za//finance-economic/transport-laws-bill-on-e-tolling-amended/
http://parlyreportsa.co.za//cabinetpresidential/e-tolling-transport-laws-bill-held-over/
http://parlyreportsa.co.za//finance-economic/transport-laws-bill-enabling-e-tolling-tabled-in-parliament/

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Bumpy road for e-tolling Bill continues

E-tolling finally makes it through Parliament…

Discontent was expressed once again regarding the Transport and Related Matters Bill regarding e-tolling when opposition members complained that the Bill had been classified as Section 75 for national competence only, therefore denying the National Council of Provinces the process under section 76 of the Constitution whereby the Bill and its contents could be debated and approved at provincial level.

Johannes Makgatho, department of transport, told parliamentarians of the select  committee on transport, NCOP, that when the South African National Roads Agency Limited (SANRAL) Act was promulgated, electronic toll collection (ETC) was not envisaged in its current form. The development of the Gauteng Freeway Improvement Project (GFIP) had necessitated ETC and the Bill was necessary.

Sanral goes big on bonds

road tollsThe Bill was described by DoT as being of vital importance for the collection of tolls, the lack of which would have a negative impact on the ability of government to raise capital for their infrastructure projects. SANRAL had issued bonds to the tune of R24bn and the inability to collect tolls to repay the bonds would imperil the state guarantee provided to SANRAL, Makgatho said.

Ms Suraya Williams, Principal Law Advisor from the Office of the State Law Advisors, told the committee that that the regular ‘substantial measure’ test was applied to the question of whether the Bill should be tagged under section 76 for provincial debate but according to this established constitutional process, the Bill had been found to be a Section 75 Bill.

Who has heard of Cross Border Agency?

The Democratic Alliance said that it did not object to e-tolling in principle but considered there was a lack of public participation on the project and the process of e-tolling as a whole and this was unacceptable. Also all funds were to be collected by a body known  as the Cross-Border Road Transport Agency, which they said was a relatively unknown entity and were deeply concerned that this body was competent.

The DA added that this state entity had already been found unable to handle its own finances and got into difficulties handling just cross-border taxi industry matters. Mr Alex van Niekerk, Manager of the Gauteng Freeway Project for SANRAL, said the Cross-Border Agency had indeed experienced much difficulty initially with vehicles entering the country and travelling on roads which had not been tolled, but they had now built up experience with e-tolling and were ready for GFIP and national e-tolling as it built up.

Like cellphones

Mr van Niekerk explained that e-tolling would replace conventional toll plazas and that tolls would be recorded electronically in reference to barcodes which recorded the type and status of the vehicle in the same manner as prepaid airtime on cell phones. Existing toll plazas would remain but rather than manual payments, the plaza would read the tag and give access if there was credit on the account.

He said the principle of tolling did not change at all, only the mechanism of tolling changed and “non-compliance at the time of travel could therefore be remedied after the fact.” No profit, he added, would be made by SANRAL in the collection of toll revenue and he added that technology for the GFIP was considered “cutting edge”.

The Bill has now achieved NCOP concurrence and has gone forward for final reading. It then goes to President Zuma for assent.
The following articles are archived on this subject:

 http://parlyreportsa.co.za//finance-economic/transport-laws-bill-on-e-tolling-amended/
http://parlyreportsa.co.za//cabinetpresidential/outa-goes-to-supreme-court-of-appeal-against-bill/

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Transport Laws Bill on e-tolling amended

Public disclosure written into Bill….

road tollsProposed amendments to the e-tolling Transport Laws and Related Matters Bill affecting alternative routes which are used to avoid or by-pass tolling systems – amendments originally proposed by the Freedom Front Plus (FF+) and subsequently amended by the Democratic Alliance (DA) and which vitally affect public disclosure – have been accepted by the parliamentary committee on transport and will be incorporated in the final Bill to be presented to the National Assembly for approval.

The Bill as originally tabled makes the proposition of e-tolling legally acceptable on a national basis. However, in a subsequent move, published proposals came forward from the FF+ to the effect that all socio-economic reports and traffic impact assessments compiled on alternative routings must be made available to the province concerned and every municipality affected before any e-tolling project can commence.

Alternative routes get heavy use

The FF+ proposal was on the basis that a considerable number of small towns and local governments have been badly affected by heavy traffic, where heavily used by-pass routes, now required by law, have been picked to obviate the necessity of paying e-toll fees.  Lower grade roads have sometimes been made impassable and even bridging damaged.

On the basis of the FF+ request, the necessary proposals were published but during the process of adoption it was pointed out by the DA that such amendments were still not acceptable. Whilst the principle was right, they said, the amendment was insufficient since no guarantee was provided on public consultation or public involvement, particularly in the case of the affected parties.

 

No chance to hide

Ian Ollis, shadow minister of transport said, “What happens if a provincial officer or somebody at local government level, maybe even somebody who has a vested interest fails to disclose the reports or impact assessments or even hides them in a drawer?”, he asked. The case of OUTA was a case in point, he said.

After debate with the state law advisor, the DA’s additional proposal that all such reports on socio economic factors and all impact assessments involving matters regarding e-tolling were to be published in the government gazette for public consumption, was accepted.

The Bill will now go forward to the NCOP for approval.

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OUTA goes to supreme court of appeal on Bill

OUTA seems to have forgotten Parliament….

The decision by the Opposition to Urban Tolling Alliance (OUTA) to spend many hundreds of thousands of rands of public money to obtain a judgement from the North Gauteng High Court to set aside e-tolling on the basis that legislation making e-tolling possible was not debated in the proper manner seemed at the time a little odd when OUTA did not  itself  make a submission to Parliament on the legislation or accept a  debate with portfolio committee on transport when invited to do so.

The fact that the decision by the Gauteng High Court has been reversed still excludes Parliament which seems to be yet another example of living with the belief that the world ends at the Jukskei River.

OUTA seems to be unaware of the fact the Transport Laws and Related Matters Amendment Bill is a national Bill which has been tabled; the matter is a national issue and that Parliament is the home of an independent parliamentary debating process surrounding the anchor legislation, whatever inputs may come from SANRAL, OUTA, the minister of transport or threats from COSATU.

According to the records produced at a meeting of the portfolio committee on transport to finally debate and approve the Bill, the committee spent nearly R200,000 on advertising the request to “Have Your Say” on the Bill, the normal insertions for a Bill known to be contentious.  The record also shows that most of this spend was on national dailies and the weekend press, as it so happens mostly printed in Gauteng.

The scurrilous suggestion by COSATU that no such advertising took place was a lie, possibly placed by COSATU to influence OUTA, and reflects the fact that COSATU  knows full well that Parliament was the home for such debate.

That’s why COSATU was there in full strength, one of two parties who bothered to appear in Parliament.   BUSA failed to appear in person, submitting comments in writing, which kind of submission becomes a very watered-down affair.

The fact that the South African Local Government Association (SALGA) did make a full submission (and a very good one) and succeeded with an effective amendment that whenever and wherever a toll is built a full debate must take place with the municipality or local authority, was accepted by Parliament. Which seems to prove a point.

Also the Bill was re-worded to the effect that alternative routes around the affected toll road are to be demarcated. Well done SALGA.

COSATU’s own suggestion to stop e-tolling on the basis of selection against the poor with no constructive suggestions as to how national roads were to be future-funded led to a rejection by members of the transport committee.

SALGA concluded in their submission that a lot more work needs to be done on advising the public how e-tolling  works; advertising on why it is necessary; pricing structures to be seen visually on approach; what any alternative routes are; what the discounts are about and how and when to buy an e-tag and if it is always necessary.

SANRAL, who were present at both the hearings and subsequent debates accepted privately this advice given by SALGA to the satisfaction of the portfolio chairperson and although SANRAL had no speaking role in the subsequent legislative debate, once again their presence was felt.

Even the parliamentary portfolio committee admitted in conclusion when the Bill was approved that nobody really wanted e-tolling but were clearly angered by the OUTA and COSATU suggestion that “nobody was informed on the Bill” and even more curious to know why OUTA itself was nowhere to be seen in Cape Town.

Presumably the Bill will go to the National Assembly now that Parliament is re-assembling and concurrence eventually sought from the National Council of Provinces. Presumably also OUTA is hoping that the Supreme Court of Appeal, where the matter is now headed, will instruct the minister to withdraw the Bill.

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e-tolling on a user pay basis mapped out

 From “Q&A” replies….

The minister of transport, Ben Martins, in a written reply to a parliamentary question asking if the decision to fund e-tolling out of the public pocket was final and whether his ministry would consider alternative forms of road financing,   replied that “toll financing on a user pays basis provides infrastructure earlier than would have been possible through general taxation. As a result, the benefits of increased roadway capacity are available to the public sooner.”

His reply stated that in 2005, when the implementation of the Gauteng Freeway Improvement Project (GFIP) was under consideration, the then minister of transport, Jeff Radebe, required the proposal to be evaluated by an inter-governmental municipality working group. The working group at that point considered the need for the project, policy, project principles and funding options.

Funding options considered were:

  •  fuel taxes where it was not ring fenced
  • vehicle registration/license fees and traffic fines
  • development impact fees
  • shadow tolling – no tolls are levied from road users under this approach. Instead, the shadow tolls are paid by government to the operator based on traffic counts on the road, an agreed rate per  vehicle/vehicle type and an agreed set of performance criteria.
  • tolling – a user-based funding mechanism for road infrastructure development. It enables the mobilisation of substantial capital funds upfront, usually through debt equity, for the construction of infrastructure such as freeways.

It was agreed at that time that the GFIP would be implemented using the user-pay principle (tolling), the reply states, so that there would be sufficient money on hand to start, the main principle being that with a user-based funding mechanism for development, the mobilisation of substantial capital funds upfront is enabled, usually through debt or equity, for the construction of large infrastructure such as freeways.

Toll financing, the minister said in his reply, had the distinct advantage of providing infrastructure earlier than would have been possible with financing through general taxation. As a result, the benefit of increased roadway capacity would be available to the public sooner, he said.

In general, tolling is regarded by the ministry, said minister Martins, to be an equitable way of funding large infrastructure projects and did not compromise fiscal integrity.

He pointed out that South Africa had a total estimated road network of 740 000 kilometers in the form of paved and gravel roads.      The provincial and national road network comprises 82 000 kilometers of road.        In all, only 3120 kilometers of this road network are toll roads.

Parliamentary hearings are now to follow.

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Cabinet decides that e-tolling will proceed

In a cabinet statement this week cabinet made it clear by  approving the Transport Laws and Related Matters Amendment Bill for tabling in Parliament that the e-tolling development generally and particularly on the project known as the Gauteng Freeway Improvement Project (GFIP), was going ahead.

The heart of the matter remains the electronic toll collection system and the new Bill will give the South African National Roads Agency Limited (SANRAL) the full enforcement powers it needs to ensure payment of tolls.     Between the new Bill, SANRALS’s own founding legislation and National Roads Act, all put together, allowed Ben Martins, minister of transport to consider that SANRAL will eventually be in  sufficient compliance to both enforce and administer e-tolling.

In a meeting a few weeks ago, the Urban Tolling Alliance (OUTA) and the newly formed Inter-Ministerial Committee (IMC) on the Gauteng Freeway Improvement Project (GFIP), OUTA all agreed that the national fuel levy continue to be used to fund freeway improvements since this was the established and fair procedure for road development.

The OUTA delegation included the South African Vehicle Rental and Lease Association, the Automobile Association, the South African National Consumer Union, Investment Solutions and the Retail Motor Industry, led by Wayne Duvenage.

Nobody disagreed on the need for users to pay for road improvements; the need to decongest the country’s roads; and the need for more efficient public transport but focus again fell on the method of funding use, i.e cameras on e-toll gantries whether e-tolling as a procedure would solve congestion.

OUTA welcomed the GFIP it said at the time and commended the South African National Roads Agency Limited (Sanral) was a well-managed road building entity but argued that e-tolling was not efficient or effective as a funding mechanism in itself. Where OUTA disagreed was that the existing national fuel levy be used to fund freeway improvements in view of the current use of the levy to build and maintain roads countrywide.

Government has always stressed the need that whatever happens, users had to pay and and it appears that the ministry was far too far down the e-tolling contractual development of building to wish to alter its course, aside from any policy decisions on the matter.

Posted in Cabinet,Presidential, Finance, economic, Fuel,oil,renewables, Public utilities, Trade & Industry, Transport, Uncategorized0 Comments

E-tolling debacle a lack of collective effort

Perhaps to illustrate the difference between planning budgets for infrastructure development such as road development and the carrying out the such projects in the field, a comparison to the e-tolling debacle might be considered as somewhat cruel but nevertheless it does clearly illustrate that where the sum of R20bn is flying about, there’s a lot more to e-tolling than just building gantries.

Mostly, it’s because projects such as this involve people and where people are involved what is needed is a collective effort. The hiatus now represents an example of one government department “doing its own thing” without reference up or down with provinces or even sideways with national treasury.

Indeed, aside from co-ordination between government departments, which is difficult at best, is the question of talking to people.  In the case of the new Gauteng Highway Tolling System, government has found itself totally on the wrong side with consumers; consumer bodies; chambers of commerce; COSATU; the judiciary; and even sections of the ANC, let alone a taxi and bus industry only just mollified from strike action by exemption from tolls.

The reason given for the impasse now being experienced is that the financial deal struck, and subsequently signed for, is in default and the interest charge for “nothing to happen” is breathtaking.

Sadly, the investment world has been watching, coming as the debacle does with some extraordinary statements by Lucky Montana, CEO of PRASA, to parliamentarians on the manufacture and purchase of R300m in passenger railway coaches.

Deputy minister of transport, Jeremy Cronin, who provided oversight on the financial horrors of the Road Accident Fund, said it all in an article in the Sunday Times.

He was discussing how history comes back regularly to haunt us in South Africa and that the flippant dismissal of the weight of our past on our collective present is unhelpful. “We have been left in South Africa”, he said, “with a toxic mix of poor accountability, weak capacity and an inadequate public service ethos.  There is a need to appreciate the collective effort required to transform our often dysfunctional reality.”

Posted in Cabinet,Presidential, Public utilities, Trade & Industry, Transport0 Comments

E-tolling becomes a financial mess

With the department of transport gazetting draft regulations for public comment dealing with exemptions from toll fees on Gauteng toll roads, the recent Gauteng regional court decision to put tolling on hold has caused a legal and financial  implosion of considerable complexity.

 Written comment was invited until 9 May, 2012, the Gauteng Freeway Improvement Project having expected to be started on 30 April. The cancellation of the process sets an unfortunate precedent for e-tolling on highways around the country.

The gazetted notices were published in terms of the South African National Roads Agency Limited (SANRAL) and National Roads Act of 1998, together with a notice making known the places at which tolls can be paid.

On exemptions, commuter vehicle concerns were addressed inasmuch that taxis and buses, together with emergency vehicles, were exempted from paying toll fees. Exempted vehicles are to be issued with an e-tag for identification purposes when they pass through the tolling gantries.

The notices explain how non-registered e-tag users and non-registered vehicle licence number users are to make payment. SANRAL is to have mobile pay stations located alongside the toll roads to enable motorists to make payments.

Meanwhile Jeremy Cronin, deputy minister of transport, addressed the National Assembly a few days before the Gauteng regional court decision, answering criticism from opposition members parliamentarians.

He had said earlier in Pretoria that e-tolling in Gauteng was the only viable way to pay for the R20 billion spent on improving the province’s freeways. Opposition MPs were requesting rather to implement a small fuel levy to cover the cost of the SANRAL 20bn project.

Ian Ollis, shadow MP for transport, had complained it would cost over R1bn a year just to collect the fees and described it as “the world’s most expensive toll collection system”. He noted that the R20bn was being spent on a highway project that only involved about 180km of road.

Cronin agreed that “the particular tolling option that had gone forward was very expensive” but added that any national  levy, such as the one proposed on fuel, would be unfair to people living in other parts of the country who would be paying as a result for infrastructure in Gauteng.

Cronin acknowledged that there was “great unhappiness” over the introduction of e-tolling and any further spending on the project had ” been put on hold”, he said, adding that paying off the project debt by increasing the fuel levy was not an option.

Opening the debate in the National Assembly, Transport Minister Sibusiso Ndebele said South Africa had a responsibility to service the debt incurred when the project to improve the road network in the province was implemented.

“It is now public knowledge that South Africa has a financial obligation of R20bn to this effect, escalating to R32-billion with interest over the next couple of years.”Failure to honour this obligation will adversely affect our country’s credit rating.”

Minister Ndebele said he was “encouraged” by the fact that, to date, a total of 501 245 e-tags had been sold. At the time he was responding to the national budget where department of transport, received an overall R39-billion budget allocation for this financial year, which will rise to R48-billion by 2014/15. About R18bn of this is earmarked for roads.

Returning to the point raised by Cronin that all spending was on hold, earlier in the week the ANC had issued its own statement on the matter welcoming the delay the implementation of the e-tolling system by a month indicating that they too were in doubt about the system.

In a separate statement the DA’s Jack Bloom commented that in his view “the best thing for the government to do was to forget about e-tolling and move on to another funding method”, noting that damages would have to be paid in cancelling any contract but he repeated his colleague’s point that this might be cheaper than carrying on with a toll collection system that was as expensive as the road being built.

Quite clearly the next move will have to come from the minister of transport or, perhaps, even President Zuma himself or his deputy. An appeal against the regional court’s decision is reported to be a lengthy process.

 

Posted in Cabinet,Presidential, Finance, economic, Justice, constitutional, Public utilities, Trade & Industry, Transport, Uncategorized0 Comments


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