SAVRALA Contests Claimed Toll Benefits

SAVRALA (Southern African Vehicle Rental and Leasing Association) representing approximately 450,000 vehicles continues to be surprised by the ongoing e-Toll benefit motivations presented by SANRAL, its principal, the Department of Transport and more recently, Transport Economist Dr Roelof Botha.
These parties often refer to a Gauteng Freeway Improvement Project (GFIP) 8.4 benefit cost ratio. Simply put, this hypothesis claims that for every R1 spent on the tolls, motorists will receive a benefit of R8.40. This claimed benefit is sourced from the Economic Analysis of the Gauteng Freeway Improvement Scheme prepared in August 2010 by the Graduate School of Business (University of Cape Town) for both the South African National Roads Agency (Pty) Ltd and the Provincial Government of Gauteng. This claimed benefit cost ratio was also presented in last year’s GFIP Steering Committee Report.
As this claimed benefit is one of the key motivations for the e-Tolling project, SAVRALA would encourage these parties to take note of the Minister of Transport’s reply, tabled on 31 October 2011, to a Democratic Alliance question on the claimed GFIP benefits raised at the National Assembly (Question no 2598);
“As can be seen, the key assumption of the 2007 feasibility study was that the GFIP Project would reduce congestion. In my considered view, and in retrospect, the original feasibility study did not sufficiently weigh up international evidence suggesting that freeway expansion often does not in the medium term resolve congestion challenges, and often induces greater demand.
It also failed to consider alternative solutions to congestion – improved public transport provision, moving more freight onto rail and a curb on urban sprawl. The project benefits to road users may, therefore, unfortunately not be forthcoming. This is the subject of further assessments and consultations by the Department of Transport and a Cabinet Task Team”.
The claimed GFIP benefits of time savings, reduced vehicle expenses and lower accidents are again based on questionable assumptions derived in many instances from information unchallenged by SANRAL itself. It is also important to note that the Economic Analysis of the Gauteng Freeway Improvement Scheme did not request any input from any of the affected stakeholders like SAVRALA.
Surely it is time for a proper public and independent economic analysis to be conducted. It is also essential to separate the actual construction of the roads from their funding model. SAVRALA agrees with SANRAL on the need for the GFIP and that it will provide some benefit, but how much and at what cost is now a moving target. In reality, the viability and efficiency of the proposed e-Tolling model is now well beyond any economic argument.
After the Minister of Finance last month contributed almost R6 billion from Treasury to fund SANRAL’s outstanding GFIP debt, the balance now due is approximately R14 billion (excluding interest payments). Unfortunately, SANRAL have not made the actual impact of the contribution from the Minister of Finance to the total GFIP debt public. This means one has to determine the relative economic efficiencies of the e-Toll model at a rather crude level. However, the message is clear: economically, it is irrational to continue with a revenue collection scheme that will very conservatively cost the GFIP users just over R6 billion (although it has been estimated to be as much as R11 billion), to collect the outstanding R14 billion, resulting in an e-Toll administration cost to revenue ratio of 43 percent.
This is an unacceptable percentage for administration costs and contradicts the Minister of Finance’s earlier call this year for all parties to be wise with scarce resources.
SAVRALA, and many other business and civil associations, have never disputed the need to pay for the costs of GFIP, however, jointly they continue to oppose the unacceptable levels of cost for a wieldy administration imposed by the e-Tolling funding mechanism. SAVRALA therefore calls on the Government to seriously consider other less costly funding models like, the revenue raised from the Fuel Levy, as one of several other funding mechanisms.
Further, SAVRALA remains perplexed as to why the Government remains obstinate in the extreme about the drive to implement such an inefficient and costly system, given the extensive and growing resistance to e-Tolling across South African society, including some elements of Government itself.
It is also of great concern that our Government agencies and their various spokespersons are reverting to verbal bullying and threats against its citizens should they wish to exercise their rights and not register for an e-Tag but rather pay the non-discounted rate given the concerns about individual/account information protection etc.
What is needed is greater transparency regarding the terms and conditions of the ETC (Electronic Toll Collection) tender document and the extent of the potential financial penalties, should the e-Toll project not proceed. The current stance only corroborates Government’s stubbornness to proceed despite all logical and economic reasons to rethink the project.
It has, however, become painfully obvious, that this is the biggest public uprising against a decision taken by government since the birth of our new democracy 18 years ago.

Savrala Seeks Legal Advice

“Following the Finance Minister’s announcement to continue with E-Tolling of Gauteng’s freeways in the budget speech on 22nd February, SAVRALA has expressed their disappointment and have now moved to consider a legal challenge to this action” says Wayne Duvenage, Vice President of SAVRALA.
Our position has been made clear over the past whereby the decision taken to toll our urban freeways in Gauteng is nothing short of being dismissive of a number of rights of the citizens of this country. Government’s role is to use its citizen’s taxes wisely, efficiently and to ensure that costs are minimised when providing services and the necessary infrastructure to conduct business. This has certainly not been the case here.
The user pay principal being bandied about as one of the motivations for the government’s decision in this regard is weak, inconsistent and flawed. This is not a case of Gauteng’s roads and Cape Town’s roads and Durban’s roads. These are ‘all our’ roads and we should not entertain this charade around why non-Gauteng citizens should not have to contribute to Gauteng’s roads. Gauteng citizens have no problem with the un-tolled freeway upgrades that other cities have enjoyed in the past. To go down this road means that every other city’s freeway upgrades going forward will suffer the same fate, something we know will not be entertained by our fellow citizens.
Furthermore the expenses to administer and enable e-tolling is extremely costly and an unnecessary burden to the citizens of Gauteng, who by the way, contribute more than their fair share of taxation and revenue to the national treasury and are in effect the funders of other provinces. To suggest that the gantries are up so we must just accept this is tantamount to throwing good money after bad. This is not a done deal.
SAVRALA has now taken further steps and progressed with seeking advice and legal opinion on its position. “Our decision to seek a legal route is not being taken lightly or flippantly,” says Duvenage, adding “We are also receiving numerous calls from other organisations, associations and individuals to support our challenge and are assessing options to incorporate these into a coordinated strategy”. Further announcements in this regard and the developments in our legal challenge will be released as and when these are able to be shared.