Toll Roads: Government robbing the public

The building cost per kilometre of the Gauteng toll road project is between 106% and 228% more expensive than that of equivalent global road improvement projects, according to research by economist Mike Schussler.

The research report presented on Tuesday at the third round of public consultations and engagement on the tolling of the Gauteng freeway system and public transport improvements, requested an independent probe into the building costs and asserted that it would be “inappropriate” to hold consumers and road users responsible for these costs.

The report, commissioned by AfriForum and the Road Freight Association (RFA), found that the monthly income of R300-million that the South African Roads Agency Limited (Sanral) would receive from Gauteng toll fees was significantly higher than the monthly requirement of R193-million to finance the project’s cost of R20-billion over 20 years.

“The proposed toll fees would not only finance the project, but also become a source of income at road users’ expense.”

Although national roads in Gauteng only represent 4,5% of the total length of the national road network, Gauteng toll fees would generate an estimated 58% to 62% of Sanral’s income by 2012.

The report stated that the financial burden, which the new toll fees would put on Gauteng residents, was equal to an increase of 2% in personal income tax.

“The poor would also be severely influenced by the increase in the cost of basic products, as the price of bread would have to increase by 2% to cover the soaring transport expenses.”

The report recommended that a regulatory body be established to oversee toll fees and to prevent road users and consumers from being exploited by exorbitant toll fees.

AfriForum CEO Kallie Kriel said the toll fees should be adjusted dramatically downwards in light of the report’s findings. Further, it must also be ensured that value added tax (VAT) is not charged on toll fees, and toll fees should be tax deductible for the public.

“It would only be fair, since the new Gauteng freeway improvement project (GFIP) is financed through external loans. No money from the treasury will be used for this project, while motorists are being taxed fivefold through income tax, fuel levies, car licensing, toll fees and the VAT on toll fees,” he noted.

Meanwhile, Democratic Alliance (DA) representative Neil Campbell indicated that the DA was not opposed to the principle of tolling, except that in their view the programme was imposed on the motorist and the commuter.

Speaking on behalf of the Gauteng provincial South African Communist Party, Pat Ntsobi acknowledged the improvements that have already been made on the province’s freeway system, but said that the organisation was opposed to the tolling because of the possible impact it would have on the poor and working class.

Transport director-general George Mahlalela indicated that the Steering Committee, which was appointed to review the toll tariff structure, would be consulting with other stakeholders on April 6, following which all the presentations and inputs would be consolidated into a single report. Upon this consolidation, all the stakeholders would be reinvited for feedback.

A consolidated report would also be presented to Transport Minister Sibusiso Ndebele and Gauteng Premier Nomvula Mokonyane by the Steering Committee before the end of April.

http://www.engineeringnews.co.za/article/toll-roads-building-costs-more-expensive-than-international-norm—economist-2011-04-05
[date:] 2011-4-05

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