Tag Archive | Parlliament

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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