South Africa’s road replacement cost insurmountable

South Africa’s road replacement cost was estimated to be over R2 trillion back in 2013, and failure of the road network imposes an estimated R20 billion, per year, in road user costs.

This emerged during a Transport Forum Special Interest Group event, ‘Setting the stage: Road Funding and South Africa’, which was hosted by Aurecon in Pretoria this week.

The daylong event, sponsored by the Electronic Toll Collection (ETC) company, comprised presentations from several transport industry experts, economists and stakeholders, and concluded with a panel discussion moderated by programme director Mike Schȕssler.

Mr Whity Maphakela, director of road infrastructure and industry development at the Department of Transport, revealed the R2 trillion figure during an overview of South Africa’s road funding policy.

“There are serious implications if we don’t maintain our roads,” he said. “Delaying road maintenance by three or five years can increase the cost of repairs as much as eighteen-fold,” he stressed.

Mr Maphakela indicated that periodic maintenance has resulted in a rapid deterioration of the road network in South Africa. Current maintenance efforts at current funding levels, are also inadequate to address the maintenance backlog.

“Presently, there is an acute shortage of funds for road infrastructure implementation and maintenance programmes. This has led to deferred maintenance programs and large backlogs.”

The growing backlog of deferred maintenance requires R197 billion, with the cost of poor roads largely felt by the road user.

He added that roads authorities needed to consider alternative funding models, in which they partnered with the private sector for the construction, maintenance and financing of projects. He also reaffirmed government support for implementation of the user-pays principle.

Funding the R2 trillion replacement cost of South Africa’s road network – over a 10 year period without tolls – would require a fuel levy of around R9 a litre or R18 000 in vehicle license fees, suggested Schȕssler.

Advocate Alta Swanepoel later provided an overview of laws regulating roads and road transport in South Africa.

“We must realise that sometimes when some people encourage others not to obey one law (like paying e-tolls) they end up not obeying others, like paying traffic fines. Payment of traffic fines dropped to just 8% in 2013,” she cautioned.

Ms Swanepoel said a proposed amendment to the SANRAL Act states that the determination of e-toll tariffs be taken away from the Transport Minister and be given to an independent Transport Regulator.

Professor Stephan Krygsman from the Stellenbosch University, explained that transport is the second highest expense in the average South African household.

“We need to restructure to shorten travel distances,” he said.

He added that globally, new road user charging recovery methods are being designed and piloted. “Citizens are demanding insight and participation. Other countries have embraced and adopted technology. South Africa lags these trends for various reasons, but technology is not one of them.”

Krygsman explained that the components that make up the user-pay principle include infrastructure, environmental, accident and congestion costs.

“South Africa uses the fuel levy as a main road use ‘tax.’ The fuel levy is determined on historical principles and fiscal need and there is no calculation made on how much this should be i.e. it is not related to road user costs.”

He queried if this trusted cost recovery method was becoming inefficient. “The fuel levy is generating less income per vehicle per annum. There is roughly a 1.1% decrease per year (inflation could decrease this further by 5%),” he pointed out.

Krygsman explained that roads competed with all the other funding priorities and demands imposed on the National Revenue Fund. The policy on the financing of roads, however, is also primarily the responsibility of the Department of Transport.

Krygsman said road users pay 62c/km to drive on South Africa’s roads, while government is paying 74c/km to build and maintain these roads. He said we need to be able to quantify things like congestion, environmental, accident and maintenance costs.

“Congestion costs Cape Town R60 billion a year,” he added.

Professor Krygsman motivated for the establishment of a Road User’s Authority, Road Fund and Financing Guidelines as well as a Transport (Economic) Regulator.

Mr Coenie Vermaak, CEO of the Electronic Toll Collection (ETC) Company, gave a South African perspective on e-tolls.

“We expect there to be 18 million people living in and around Gauteng by 2037. We estimate there will be about 3.1 million peak hour trips between Johannesburg and Pretoria, daily,” he began.

He added that by 2037 the average road network speed between JHB and PTA will be below 10km/h if we continue to do nothing to improve road infrastructure.

Vermaak indicated that e-toll collection currently sits at roughly 30%, less than half of the 70% envisaged. The Gauteng Freeway Improvement Project’s (GFIP) phased approach includes 201km of freeways completed in Phase 1. Phase 2 of GFIP plans to add 158km of new routes (currently on hold).

“I think we have a societal problem with non-compliance in South Africa. We bend the rules a bit. It starts with not stopping at the robot at 5am. We desperately need the funds. If we do not pay, we cannot unlock future economic investments.”

He said the GFIP system was designed not to prejudice or burden the poor, while having the benefit of a new road network.

“Government went overseas to get a system. That knowledge was transferred to South Africa. Government got a lot right in this process. Over 1 200 South Africans are employed by ETC. This technology belongs to South Africa.”

He said the technology ETC has can be applied far beyond e-tolling. “There are opportunities that we can leverage far beyond roads. With 4 000 cameras monitoring the GFIP, we can dispatch an emergency vehicle to anyone within eight minutes.”

Vermaak believes that the fuel levy won’t work to fund the GFIP, stating that it is an unfair contribution, is not ring fenced, is biased towards high income earners, is a diminishing fund and is estimated to increase the fuel price.

“There needs to be accountability and enforcement. The reality is this e-toll system will cost a private car user no more than R266 per month, regardless of how much they drive.”

He dismissed allegations of corruption in the e-toll tendering process.

“The Public Protector at the time cleared SANRAL and Kapsch of any wrongdoing. There is an emotional barrier we have not been able to overcome. Road users are upset with government and motorists withholding e-tolls is a way to show that,” he said.

“We must use this asset that we have already paid for. We need to get people to comply because we desperately need to get building on Phase 2 of the GFIP,” he concluded.

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