Tag Archive | Nazir Alli

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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