Tag Archive | GFIP

Transport Laws Bill enabling e-tolling tabled in Parliament

Public hearings to be scheduled

The minister of transport has now tabled the Transport Laws and Related Matters Amendment Bill in Parliament, the department of transport department having gazetted a notice announcing such intention in early August this year and obtaining cabinet approval for the Bill that month.

The Bill provides the South African National Roads Agency Limited (SANRAL) with the necessary legal structures to enforce e-tolling, SANRAL having the responsibilities of planning, design, construction and maintenance of roads in South Africa.

However, it became quite clear during the furore that surrounded the announcement of the development of the Gauteng Freeway Improvement Project (GFIP) that SANRAL had neither the competence or legal structure in place for e-tolling in place and that the development was “out of sync” with the necessary legal requirements for both the implementation of e-tolling and its enforcement of a user-pay system.

All of this followed the setting aside of an interim order that halted the GFIP and implementation of e-tolling by the Constitutional Court in September 2012.

The Transport Laws Bill specifically allows for SANRAL to operate a road network that makes use of “intelligent transport systems” therefore giving SANRAL authority to exercise e-tolling; in effect a response to the constitutional decision.

The Bill will also provide more enforcement powers to ensure that motorists pay e-tolls and since SANRAL is responsible for any strategic planning for South Africa’s roads, such which allow the process on a national basis.

In their recent annual report, the department of transport shows that only 5% of South African roads involve tolling but as minister Ben Martins explained to Parliament, this is a critical area of South Africa’s economic pulse and this particular portion of South Africa’s road network is mainly responsible for South Africa’s economic future.

The bill was previously published for comment in March 2010. The memorandum contained in the Bill clearly states that such legal background is necessary for any future road infrastructure development and states unambiguously that the funding of the GFIP is to come from the e-tolls raised from motorists.

On the issue of future funding, the memorandum departs from usual legal parlance and states. “The non-collection of tolls may impact negatively on the ability of the other State-Owned- Enterprises to raise capital for their infrastructure programmes and thus the need for the Bill must also be seen in the context of Government’s plans to fund its envisaged infrastructure programme”.

An inter-ministerial committee and COSATU, the latter objecting to the Bill, have met to discuss their differences.

Posted in Finance, economic, Labour, Public utilities, Trade & Industry, Transport0 Comments

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.

Posted in Finance, economic, Fuel,oil,renewables, Public utilities, Trade & Industry, Transport0 Comments

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

Taxi and Bus Exemption from E-Tolls: Cabinet confirms

Cabinet has reconfirmed that taxis and buses will not have to pay toll fees on Gauteng’s roads. In a statement released after the latest cabinet meeting, government emphasised that this decision was taken in the interests of the poor.

The Gauteng Freeway Improvement Project is set to come on stream on 30 April 2012. The poor are the main users of taxis and buses, the statement says, and added, “These transport modes will pass through the gantries free of charge”.

Reference was also made in the statement to the recent capital injection of R5.8bn announced by the finance minister, Pravin Gordhan, on Budget day. The money was made available, the statement says, “to help ease the burden on road users in Gauteng.”  The additional finance will also help government to reduce the tariffs for e-tags.

Light motor vehicles will now pay 30c per km; motorcycles 20c per km; non-articulated trucks 75c per km, whilst articulated trucks will pay R1.51 per km. The maximum amount that road users can be charged per month is to be capped at R550. The statement stressed that the credit card-linked e-toll account was not the only payment option available. Road users can also opt for the pre-paid e-toll account.

Posted in Energy, Labour, Public utilities, Trade & Industry, Transport0 Comments


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