GAUTENG TOLL ROAD STRATEGY (1998)

Report
DEPARTMENT OF TRANSPORT
PRESENTATION TO THE
GAUTENG ETOLL REVIEW PANEL
4 NOVEMBER 2014
MAWETHU VILANA
ACTING DIRECTOR-GENERAL
1
CONTENTS
• PART A – Policy, Transport issues in general
• PART B – Gauteng Freeway Improvement
Project (GFIP)
INTRODUCTION
Our presentation today is a courtesy call to you, to provide
you with the bigger picture.
To do so we will provide all the facts on:
• Policy
• Challenges
• Public Transport realities
• Road Funding
POINT OF DEPARTURE
• To implement transport solutions, funding will be required
• Economic infrastructure requires funding, ultimately all is paid
directly or indirectly by citizens of the country
• Funding policy for road infrastructure cannot be reduced to
finding a solution to a single project.
• When considering the current funding model of the GFIP as
well as alternatives, we should consider the holistic transport
funding policy and requirements of all road infrastructure in the
country.
• We must ask questions about equitability, how fair is the policy
to all South Africans?
• Therefore, the presentation to follow does not only discuss
funding policy principles of this and future phases of the GFIP,
but the overall funding policy and requirements for the country.
THE BIGGER TRANSPORT PICTURE
• Transportation consists of
infrastructure components:
various
– Road:
• Private vehicles, Public Transport, Freight, etc
• Non-motorised
– Pedestrians
– Animal drawn
– Rail:
• Metro, long distance passenger and freight
– Aviation:
• Passengers, freight, airports
– Maritime
• Harbours, freight, passengers
– Cross border trade
– Law enforcement operations
modes
and
THE BIGGER TRANSPORT PICTURE (1)
• The transport sector and the mobility it confers are linked to a level of
economic output, employment and income within any national economy,
• It impacts directly on the development and the welfare of the population.
• Poor infrastructure is an obstacle to economic growth.
• South Africa faces, inter alia, twin challenges w.r.t infrastructure
– Maintain what is has (the national asset)
– Provide for the non-serviced and under-serviced communities
• Road infrastructure helps solve both long term and short term economic
problems. In short term investment in road infrastructure helps provide jobs
for low skilled workers. In long term it has a wide range of benefits e.g.
multiplier effect (creates direct, indirect and induced jobs), reduce
congestion and carbon emission, benefits business by reducing costs of
transport.
THE BIGGER TRANSPORT PICTURE (2)
•
The importance of road transport in the South African economy is obvious when considering
that:
– In 2013 Road Freight accounted for 88 % of the total freight tonnage transported in South
Africa,
– 94 % of the 35 million daily motorised person trips recorded in South Africa, are road
based,
- Vehicle ownership doubled since 1994 (5 million to more
than 10 million)
THE BIGGER TRANSPORT PICTURE (3)
The DOT needs to ensure a sustainable transport sector that is efficient
and provides economic and social opportunities and benefits that result
in positive multiplier effects such as:
– accessibility,
– employment,
– Accidents, and
– additional investments.
The best road to progress is freedom's road.
John F. Kennedy
THE BIGGER TRANSPORT PICTURE (4)
• Mobility is fundamental to and an important characteristic of
economic activity as it satisfies the basic need of moving from one
location to the other, a need shared by passengers and freight.
• Apart from the direct cost of congestion on the economy (hours lost,
productivity and vehicle operating costs), the social impact of
congestion on society is a major concern:
– Commuters spend hours to get to and from work, many leaving in
the early hours of the morning and returning late at night.
– The social impact of congestion cannot be calculated in monetary
value only, but manifests in the social health of families, the ability
of parents to assist their children with homework, ensuring that
they attend school, family time, etc.
– In addition to the social impact of congestion above, it also has a
negative environmental load, which cannot be neglected.
• Anti-green economy
• Carbon emission.
TRANSPORT FUNDING POLICY
•
•
Transport funding policy is imbedded in various policy and legislative documents
including:
– White Paper on National Transport, 1996
– Moving South Africa, 1998
– White Paper on the Commercial Ports Policy, 2002
– The National Land Transport Act of 2009 (also governing how to procure
transport infrastructure)
– National Development Plan, 2012.
When transport systems are deficient in terms of quality, capacity or reliability, they
have an economic cost such as reduced or missed opportunities.
In 1995, the ANC government under President Mandela introduced the Masakhane
Campaign to inculcate the principle of users taking responsibility for infrastructure
development and payment of services as part of the implementation of the RDP.
President Mandela said: and I quote: “pay for what we use or else the investment will
dry up and the projects come to an end. We must ensure that we can, as a nation,
provide for the millions still without the basic services.’
ROAD FUNDING POLICY
White Paper on National Transport Policy, 1996
• The user pay principle was accepted to ensure ongoing investment in road
infrastructure and hence remove constraints to economic growth whilst allowing
for social imperatives to be prioritised, in line with policy priorities:
– The development and maintenance of transport infrastructure in accordance
with sustainable economic and development principles, within the context of a
sound financial base.
– Encourage more efficient land use, correcting past imbalances and reducing
travel distance and time.
– It further calls for the prioritisation of public transport over private transport
11
ROAD FUNDING POLICY (1)
• Context
– Hardly any significant new highway road construction
projects have been launched since 1986 except for those
that were constructed as part of toll projects
– South Africa has been spending considerably less than half
of the international benchmark for road construction and
maintenance over the past decades
– Between 1980 and 2004, the public sector share in gross
domestic fixed capital formation in the South African
economy declined dramatically
– The estimated maintenance backlog (2014) for national and
provincial roads is estimated to be R197 billion
12
ROAD FUNDING POLICY (2)
THE NATIONAL LAND TRANSPORT ACT, 2009
• Requires that transport infrastructure must be procured in
a manner that prioritises public transport, especially in
metropolitan areas.
• Roads that are free at the point of use discourage
investments in public transport.
• Government emphasis on public transport - over the past 5
years, expenditure on public transport infrastructure has
increased on average with 19,9% annually.
ROAD FUNDING POLICY (3)
NATIONAL DEVELOPMENT PLAN
• “The commission's view is that in the long term, users must pay the bulk of the
costs, with due protection for poor households. The role of government and the
fiscus is to provide the requisite guarantees so that the costs can be amortised over
time. The state must also put in place appropriate regulatory and governance
frameworks so that the infrastructure is operated efficiently. For infrastructure
that generates financial returns, debt raised to build facilities should be on the
balance sheets of state-owned enterprises or private firms that do the work.
Guarantees should be used selectively to lower the cost of capital and to secure
long-term finance. Subsidies to poor households should be as direct and as
transparent as possible. Infrastructure that does not generate financial returns such as schools or hospitals - should be financed from the budget.”
14
ROAD FUNDING POLICY (4)
• The bulk of funding for road transport infrastructure is
still provided through the fiscus
• However, the funding policies mentioned, support the
principle of direct user charges to recover capital and
operations/maintenance costs directly from those that
benefit from the use of that infrastructure
• The funding policy does not only focus on cost
recovery, but also on achieving other objectives, i.e.:
–
–
–
–
Change in travel behaviour – distance / time when
Promote the use of public transport
Environmental – use of cleaner/cost effective fuels
Urban development – reduce urban sprawl, promote
densification
– Provide infrastructure much quicker
ROAD FUNDING POLICY (5)
ADDRESSING SOME MISAPPREHENSIONS
•
•
•
•
•
The ‘users pays principle’ is sometimes understood as Government is
renouncing its funding responsibilities.
ALL money, whether tax or user charges, comes from the public. ALL
infrastructure is therefore funded by the public in one form or
another.
Fiscal constraints
• Competing needs.
The different funding methods are a way of prioritising and expediting the
delivery of road infrastructure. It is also a tool to influence driver behaviour
and travel patterns.
The ‘user pays’ approach to infrastructure provision is a way of spreading
the cost of provision more fairly.
ROAD FUNDING POLICY (6)
ADDRESSING SOME MISAPPREHENSIONS
• But the White Paper ‘users pays’ principle’ is just that: a
principle; it does not distinguish priorities for transport.
• It is a question of means and ends. ‘User pays’ is one
means of funding to meet the needs.
•
The 2009 National Land Transport Act is what sets the
priorities for all transport spending – including roads.
• NLTA says infrastructure must be procured in a way that
prioritises public transport. Tolling achieves this.
ROAD FUNDING POLICY (7)
• In conclusion, road funding policy
– Is determined by Government – not SANRAL
– Has wider objectives than purely the funding of
infrastructure, i.e. altering travel behaviour
– Is biased towards the provision of public transport.
• For the 21 403 km National Road Network, SANRAL is the
implementing agency of Government’s road funding policy.
• SANRAL does not make policy.
• SANRAL implements government’s policy.
TRANSPORT FUNDING ALLOCATION &
SHORTFALLS - ROADS
•
According to COTO Document regarding road network condition and funding requirements:
– Budget required per year to sustain overall road network: R65,8 billion (no expansion, strengthening,
improvements etc.)
– Budget required per year to address maintenance backlog for the overall road network: R14,5 billion
*Note : the table below does not provide for any expansions to road networks and excludes the SANRAL toll
portfolio
Strengthening/Regravel Backlog: Roads in Poor to Very Poor Condition (2013)
Paved
Gravel
Total
Authority
% Length Cost
SANRAL
11.36% 2 239 R 19 027 022 000
Provinces - 9 22.26% 15 301 R 130 027 898 000
Metros - 8
4.16% 1 658 R 8 290 000 000
Municipalities 3.62% 1 363 R 4 089 000 000
Total Backlog
20 561 R 161 433 920 000
% Length Cost
Length
0.00%
0
R 0 2 239
65.67% 94 131 R 18 826 140 000 109 432
8.48% 1 227 R 245 315 473 2 885
28.54% 86 245 R 17 249 009 106 87 608
181 602 R 36 320 464 579 202 163
Cost
R 19 027 022 000
R 148 854 038 000
R 8 535 315 473
R 21 338 009 106
R 197 754 384 579
TRANSPORT FUNDING ALLOCATION &
SHORTFALLS – ROADS (1)
National Treasury already reallocates more than the current fuel levy to
transport requirements.
Accordancing to COTO Document :
• To only address the network sustaining maintenance needs of
R65,8 billion per annum will require an additional R1.00 per litre of
fuel - in other words average fuel levy of R3.17 per litre
•
To address the remainder of the strengthening (5 years) and
regravel (10 years) not addressed as part of the sustain allocation
above, and gravel road surfacing backlog will require further R0.48
per litre of fuel - in other words average fuel levy of R3.65 per litre
PUBLIC TRANSPORT PROVISION REALITIES
• Government is in full support of the promotion of public
transport. Reflected in:
– Policy
– Expenditure.
• Approximately 60 % of transportation is already done via other
modes than private vehicles (National Household Travel
Survey 2013).
• 58% of workers leave home before 07H00 for urban areas
(National Household Travel Survey 2013)
– Many commuters start travelling before 04H00 in the morning to be at
work by 07H00.
PUBLIC TRANSPORT PROVISION REALITIES (1)
• The Department of Transport:
– Acknowledges that Public Transport is not yet at the level of a fully accessible
and integrated public transport system, due to a historic lack of investment
and which is being rectified.
– Presented that various public transport alternatives are currently in place, and
have been improving over the past 5 years, for both daily commuters and
private car users.
– A culture of private car usage renders the existing alternatives ineffective with
insufficient demand warranting improvements and expansion of these services
on typical road user routes.
– However, millions of commuters are dependent daily on train, bus and taxi
services currently operated in Gauteng Province.
– Issue is to improve standard of public transport services.
PUBLIC TRANSPORT PROVISION REALITIES (2)
• Various Government investment allocations, plans and projects
are being rolled out as a firm commitment to the improvement,
development and expansion of the current public transport
network over the next 5 years
– The modernisation of rail commuter services (R53 bn)
– Approximately R13 bn earmarked for Bus Rapid Transport
expansions in Gauteng.
• The establishment of a single Transport Authority in
Gauteng is far advanced to co-ordinate, promote and plan
improved integrated public transport networks within and
between the respective Metros and travel demand
corridors in Gauteng.
PUBLIC TRANSPORT PROVISION REALITIES (3)
• Various other historic and current initiatives between DOT with
metros and provinces to improve public transport services &
affordability are:
– Taxi recapitalisation
– Gautrain: 55 000 passenger trip per day on average, 5 800 of
those are on the airport line. Total passengers per day is between
27 000 and 28 000.
– Metrorail (PRASA) improvements
– Public transport subsidies: total Public Transport Operational
Grant (PTOG) allocation is R1. 819, 854.000 out of R4.
832,709.000 (total for country).
PUBLIC TRANSPORT PROVISION REALITIES (4)
• South Africa has widespread city regions as a result of past policies and
lifestyle preferences.
• Effective public transport requires dense city regions.
• 87% of public transport is road based (National Household Travel survey 2013)
– Model split: comparison 2003 to 2013 Gauteng Province only
• Train: 292 000 vs 339 000
• Bus: 192 000 vs 236 000
• Taxi: 1 328 000 vs 1 402 000
• Both capital and operational costs for public transport are largely subsidised
by Government – since full user cost recovery is too high and will negatively
impact on especially the poor.
• As a result, the provision & operations of public transport infrastructure is
expensive.
Cost of public transport
PUBLIC TRANSPORT PROVISION –
GOVERNMENT SUPPORT (BRT & Gautrain)
Service
Trips/day
Users/day
Capital cost by
Government
Annual
operations
subsidy
Operations
subsidy per
user per trip
BRT JHB
120 000
60 000
R3,1 Billion (Phase 1A
and 1B)
R522 million
R11.76 –
R15.12
Gautrain
55 0000
28 000
R28 billion
R1.0 billion (in terms
of ridership
guarantee)
R60.03
average*
Annual
operations
subsidy
Operations
subsidy per
user
GFIP
*Will reduce as ridership increases
Service
Trips/day
Users/day
Capital cost by
Government
GFIP
More than 2
million
More than
1 million
R5,7 billion once off
R0
National Treasury
contribution (once off to
reduce tariff)*
*Capital funding obtained through the issuing of guaranteed and non-guaranteed bonds
R0
PUBLIC TRANSPORT PROVISION REALITIES (5)
• Argument is raised by some that toll roads and the user pay
principle can only be implemented if sufficient public
transport services are implemented
• Approximately 28 000 users (making 55 000 trips) per day
on Gautrain & 60 000 users (making 120 000 trips) per day
on JHB BRT
• Daily users on GFIP network – more than 1 million users
doing more than 2 million trips
• Annual growth on road network – conservatively 3% therefore at least 30 000 additional travellers per year
PUBLIC TRANSPORT PROVISION REALITIES (6)
•
•
Therefore to accommodate a conservative user growth scenario experienced on the
GFIP freeways only, and then accommodate that growth on public transport,
Government needs to provide the equivalent of an additional “Gautrain” every year,
or replicate the JHB BRT network every 2 years
Still no reduction achieved in the number of current users on freeway – just to
maintain the status quo
PUBLIC TRANSPORT PROVISION REALITIES (7)
• However, although expenditure on public transport increased dramatically over
the past 10 years (R190 bn) there has not been a reduction in private vehicle
usage. The National Travel Survey showed in actual fact a growth in the use of
private vehicle usage.
• It is therefore unlikely that, despite the capital and operational investments made
in public transport, there will be reduction in private vehicle usage in Gauteng –
given the continuous growth of the province.
• As stated in the ITMP 25 document from the Gauteng Province the reality is:
– That the population in Gauteng is predicted to increase from 12,2 million people to
18,7 million people in the next 25 years
– That the number of peak hour trips in the province may increase from 2,2 million in
2013 to 3,89 million in 2037
• It is for this reason that the ITMP 25 is proposing not a single, but a number of
integrated transport initiatives to accommodate this growth:
–
–
–
–
Land Use Development (densification)
Public Transport Network
Freight Transport (Freight hubs)
Road Transport (Continued, sustainable province-wide road network mobility).
TRANSPORT PRICING
• A debate is required about how transport is priced different modes of transport are priced
• Public transport should be more attractive than private
transport, both in terms of convenience (trip time) and
pricing
• We should change concept that public transport is
only for the poor, but rather an option for all.
HOW TO MAKE TRANSPORTATION MORE EFFECTIVE
• Travel Demand Management:
– Working from home
– Flexi work hours (peak spreading)
– Ride sharing – more persons per vehicle achieved through benefit
provided to high occupancy vehicle (HOV lanes, road pricing)
• Intelligent Transport Systems (ITS): Utilising electronic
equipment (CCTV, traffic counters, etc) to monitor traffic flow
and communicate to road users in time about potential
problems (Electronic signs, web, twitter, radio, etc)
• Incident management: reduce incident duration by means of
improved on-road services
• Promoting the use of public transport – more persons in
taxis, buses and rail.
HOW TO MAKE TRANSPORTATION MORE EFFECTIVE (1)
• Densification of cities: Higher density development
and filling up empty spaces in city regions
• Prevent urban sprawl: Determine an urban edge and
discourage development outside the edge
(Both the above will make public transport provision
and services more effective)
• Non-motorised transport (walking and cycling):
Provide safe and adequate infrastructure to
encourage walking and cycling
HOW TO MAKE TRANSPORTATION MORE EFFECTIVE (2)
• Most of these options requires some form of incentive
or associated direct cost (toll or congestion pricing)
that will make people think differently about
transportation and the way they go about making trips.
LEGISLATION
• SANRAL is operating and managing the 21 403 km national
road network in terms of the South African National Roads
Agency Limited and National Roads Act, 1998
– National network expansion from 6 800km in 1998 to 21 403 km as from
July 2014
• In terms of the Act, SANRAL is a State Owned Entity (SOE)
• SANRAL is a classified as a Category 3A SOE:
– not allowed to make a profit
– not a business enterprise (therefore talk of SANRAL "profits"
is misplaced)
• The Minister of Transport is the sole shareholder of SANRAL
representing government
34
LEGISLATION (1)
• The Act determines the sources of funding for SANRAL, and
the way in which SANRAL must report on expenditure.
• SANRAL has the following options available for funding the
maintenance and expansion of the National Road Network:
– Budget allocation received via the Department of Transport
from the fiscus
– Borrow on the capital markets : issue bonds and other
financial instruments. This debt is serviced by means of toll
payable by users benefitting from these roads (toll roads).
Two options for the implementation of toll roads are
available:
• State (SANRAL) funded toll roads
• Concessions (PPPs)
35
LEGISLATION (2)
• The South African National Roads Agency Limited and National Roads
Act, 1998, Section 27 provides for the Minister of Transport to approve
any specified national road to be a toll road and may levy and collect a
toll.
• The Minister will not give approval unless the Agency:
– has given an indication of the approximate position of the toll plaza
contemplated for the proposed toll road;
– has invited interested persons to comment and make representations
on the proposed declaration and the position of the toll plaza
– has requested the Premier in whose province the road proposed as a
toll road is situated, to comment on the proposed declaration and any
other matter with regard to the toll road
– has given every municipality in whose area of jurisdiction that road is
situated the same opportunity to comment.
36
FUNDING OPTIONS FOR SANRAL
The following options to fund the identified SANRAL expansion projects are
available, if tolling is not available:
– Reprioritise existing non-toll allocations over 10 year period - delaying
maintenance on the old road network.
• Maintain – not expand - congested portions of network
• But will be disastrous for the remaining non toll road network
• With current baseline allocation for national roads, the national road
network would deteriorate from 11% of poor and very poor roads in
2014 to 47% of the network in poor or very poor condition by
2024
• This approach will be disastrous for road users throughout South
Africa, and thus for the economy of South Africa.
FUNDING OPTIONS FOR SANRAL (1)
• National Road Condition scenarios with and without
toll
Forcasted Non-Toll National Road Network Conditon
Forcasted Non-Toll National Road Network Conditon
R12bn/year Fiscus Funding for 16,283* km - With New Toll Roads
Year
2032
2031
2030
2029
0
2028
2032
2031
2030
2029
2028
2027
2026
2025
10
2027
Year
2024
2023
2022
2021
2020
2019
2018
2017
2016
2015
0
20
2026
10
Very Poor
2025
20
Poor
30
2024
Very Poor
2023
30
Fair
40
2022
Poor
Good
2021
Fair
40
Very Good
50
2020
Good
2019
50
60
2018
Very Good
70
2017
60
80
2016
70
90
2015
80
100
2014
90
Non-Toll National Road Network Condition (%)
100
2014
Non-Toll National Road Network Condition (%)
R12bn/year Fiscus Funding for 18,283 km - NO New Toll Roads
FUNDING OPTIONS FOR SANRAL (2)
• Alternatively, road expansion projects not implemented at
all
– Mobility as one of the fundamental and important
characteristics of economic activity is compromised
– Direct cost of congestion will increase
– The social impact of congestion on society (economic
and health) is compromised.
FUNDING OPTIONS FOR SANRAL (3)
• Where does toll revenue go?:
– For concessions, toll revenues are collected by the
concessionaire to recover costs for debt servicing, capital
expenditure, road maintenance, operational costs and a return on
equity.
– For state toll roads, tolls collected are directly used (ring-fenced)
for debt servicing and all other funding requirements for the toll
road network.
– The SANRAL finances are audited annually by the Auditor
General.
– No provision for “profit” is made in the SANRAL toll portfolio. All
revenue received from toll is reinvested in toll roads.
– No cross-subsidisation (toll to non toll) is permitted.
WHAT IS HAPPENING ELSEWHERE IN THE WORLD?
EUROPE:
•Extracts from (EU Directive 2011/76/EU):
– “The promotion of sustainable transport is a key element of any transport
policy. To this end, the contribution of the transport sector to climate change and
its negative impacts should be reduced, in particular congestion, which
impedes mobility, and air and noise pollution, which create health and
environmental damage.
– In the road transport sector, tolls calculated as distance-based charges for
the use of infrastructure constitute a fair and efficient economic instrument
to achieve a sustainable transport policy, since they relate directly to the use
of infrastructure, the environmental performance of vehicles and the place and
time of use of vehicles and can therefore be set at a level which reflects the cost
of pollution and congestion caused by the actual use of vehicles. Moreover, tolls
do not create any distortion of competition within the internal market since they
are payable by all operators.
See annexure
WHAT IS HAPPENING ELSEWHERE IN THE WORLD (1)
• The ability of direct user-pay charges to address congestion has
internationally led to the use of road pricing in dense urban areas to
reduce congestion in general and for specific times of day. Welldocumented examples include:
– New York open road tolling,
– Singapore,
– the London congestion charge,
– Stockholm congestion charge,
– the “toll ring” around Oslo,
– Open road tolling projects in Melbourne, Sydney and Brisbane,
– major throughways in Santiago Chile, and
– Beijing’s expressways.
PART B: GFIP
•
•
•
•
•
Transport Problem Statement
GFIP History
Consultation
Tariff history
Court Cases
GAUTENG TRANSPORT PROBLEM STATEMENT
In 2005:
 Most freeways in Gauteng had reached their design capacity
(pavement lifespan & traffic capacity).
 Peak hours were extending by 10 to 15 minutes each year.
 Resulted in congestion and uneconomical use of time with increased
vehicle operating costs and carbon emissions.
44
GAUTENG TRANSPORT PROBLEM STATEMENT
The realities that are faced in Gauteng:
 The doubling of vehicle ownership since 1994.
 More than a third of South Africa’s vehicle population is
concentrated in the country’s smallest province.
 Urban sprawl continues to expand the cities of Gauteng – it is
expensive to provide public transport infrastructure for ever
expanding urban areas.
 The bulk of public transport is road based (buses and taxis) - if
the road network is becoming congested, it results in an
ineffective public transport system.
 Infrastructure provision did not keep up with growth.
 Provision of this infrastructure is costly - without sustainable
funding, any strategy will be ineffective.
45
GAUTENG TRANSPORT PROBLEM STATEMENT (1)
 The question is how must the authorities and users of transportation,
decongest Gauteng?
 To achieve sustainable mobility for the future - collaborative effort
between the authorities and transportation users will be required:
– Authorities should implement the correct strategies and related
infrastructures
– Transport users should adjust travel habits in order to achieve
success with any strategy implemented e.g. use public transport
– Objective is simple - less trips & smarter trip decisions.
 Key success factor - the ability to fund the implementation of these
strategies and associated infrastructure.
46
GAUTENG TRANSPORT PROBLEM STATEMENT (2)
• Low population density in metropolitan areas, compared with
international figures
• Distortion in land use development as a result of past political
policy
• Urban edge keeps expanding
• Longer distances between home and work is travelled
• More expensive to provide efficient public transport
• Provision of road infrastructure did not keep up with growth in
vehicle ownership and urban sprawl
• Average PT trip length in Tshwane: 3 x London (Jeremy Cronin
– 2012 transport budget debate)
PROBLEM WAS ALSO RECOGNISED BY OTHERS
•
•
•
•
CSIR – 2001
Gauteng Province – 2004
AA - 2007
SACCI - 2010
ECONOMIC IMPACT OF CONGESTION & INSUFFICIENT
MAINTENANCE
• CSIR Report (August 2001): Imperatives for a Toll
Freeway Network for Gauteng:
– Report drafted for the proposed unsolicited bid for freeway
improvements in Gauteng
– Highlights importance of effective & efficient transport
system for Gauteng
– Recommend tolling as value based alternative to fiscal
transfers – on the back of social demands on fiscus
– Positive macro-economic impact – reduced overall transport
costs
– Project should contribute R9b to GDP (2001 Rand)
– Create 40 000 jobs (direct & indirect)
49
ECONOMIC IMPACT OF CONGESTION & INSUFFICIENT
MAINTENANCE (1)
• Gauteng Province Report regarding impact of
congestion (2004):
– Potential loss in value added in Gauteng alone (business
development) estimate R155 billion over the period 2004 to
2025, i.e. congestion would result in a loss of income of
R155 billion to the province
– Every R1 billion spent results in nearly 9 200 (9 184) direct
employment opportunities. In addition it has a multiplying
effect of 1,6, creating therefore nearly 24 000 (23 878) job
opportunities in total
50
ECONOMIC IMPACT OF CONGESTION & INSUFFICIENT
MAINTENANCE (2)
• AA conducted tests (August 2007) :
– 1600cc vehicle travelling between Pretoria and
Johannesburg
– 122 Minutes additional driving per day (40 additional hours
per month) due to congestion
– Engines operating for longer times – 1,5l/hr when idling
– Additional 705 litres wasted (469 hrs idling) per annum –
Extra R4 935/annum (R7 per litre)
– 80 000 people – R395 m per year wasted
– Excludes working time, frustration, accidents.
51
ECONOMIC IMPACT OF CONGESTION & INSUFFICIENT
MAINTENANCE (3)
• SACCI comments (Jan 2010):
– Express concern about impact on business due to
congestion and insufficient maintenance
– Based on conservative assumptions, cost of congestion on
Ben Schoeman amounts to R15m/hour
– Excludes costs associated with:
•
•
•
•
Fuel and maintenance
Late freight deliveries
Lost business opportunities
Accident costs.
52
GFIP HISTORY
BUILD-UP TO GFIP
• Since late 1990s, the Gauteng Province considered tolling as an
option to fund the upgrading of the Gauteng Freeways due to
funding constraints. They also drafted legislation in this regard,
although it was not passed in the Gauteng Legislature.
• From 2000, SANRAL together with the Gauteng Province
considered an unsolicited bid from the private sector to upgrade
certain freeways and apply a toll to the upgraded sections. This
bid was found not to be feasible and was not further explored.
• In 2005, SANRAL presented to the Minister of Transport a
scheme to upgrade and expand the freeway network in Gauteng.
• The Minister of Transport required the proposal to be further
evaluated and an inter-governmental (National, Provincial,
Metropolitan and District Municipalities in Gauteng) workgroup
was set up to determine and agree project principles.
• The Department of Transport was chairing this workgroup.
BUILD-UP TO GFIP (1)
• The proceedings of the inter-governmental workgroup resulted in
a report titled: “Gauteng Network Integration Process: Proposal for
a Gauteng Freeway Improvement Scheme”. This report was
concluded in May 2006.
• The report concluded that the scheme should be further explored
with an objective to;
– improve living conditions
– ensure sustainable economic growth in the Gauteng province,
and
– To reduce traffic congestion and associated costs/delays to
road users.
BUILD-UP TO GFIP
(FUNDING OPTIONS) 2
• Funding Options Considered for GFIP by the intergovernmental
committee (2006 report):
– Fuel Taxes - South Africa had a “dedicated fuel fund” in the past that
ring-fenced funds for road projects. However, the levy was abolished
in 1986.
– Vehicle registration/license fees and traffic fines - income
generated and collected by provincial and local spheres of
Government. It is not necessarily available to transport authorities.
– Development impact fees - Developer contributions towards
infrastructure provision are taking place - not on a formalised,
national basis. Assist local network improvements, not freeway
development & expansion.
BUILD-UP TO GFIP
(FUNDING OPTIONS) 3
– 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. The
option does not create a new source of funds, or from making users
internalise the external costs of their travel, but rather from Government
commitment to continued financial support over several years. Shadow
tolls is therefore simply a way to determine usage of a facility in order to
compensate the operator/funder of the facility in accordance with an
agreement.
– 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.
• Since insufficient funds were available for the implementation of the GFIP, it
was agreed that the user pay principle – "tolling” should be recommended to
implement the GFIP.
BUILD-UP TO GFIP (4)
• The report concluded that the scheme must be based on the
following principles:
– promotion of public transport and travel demand
management,
– enhancing the concepts of intelligent transport systems
(ITS) and road network management,
– ensuring sustainable maintenance, upgrading and
expansion of the freeway network,
– the user pay principle as a financing tool for the scheme,
and
– that it is implemented as a state toll scheme.
• Each member submitted the report to their respective
principals.
BUILD-UP TO GFIP (5)
• SANRAL was tasked to further develop the GFIP with participation
of officials of the province and councils.
• Following studies were conducted:
– Social impact study,
– Economic impact study,
– Specific road improvements, and
– Traffic modelling and Toll feasibility studies.
BUILD-UP TO GFIP (6)
In concluding the rationale for implementing the GFIP, the following extract from the social impact
study demonstrates why doing nothing was not an option.
“With regard to the first scenario (do-nothing) a range of negative social impacts emerge
at the socio-economic, personal, family and work levels. In this respect it is noted that
the current state of the system has an overall negative impact with regard to the time
spent by commuters travelling to and from work and pursuing their daily business. The
safety and health of these commuters is at risk and the economic implication for both
commuters caught in traffic on a daily basis and the country as a whole are
unacceptable. It is clear that the current situation is untenable and needs drastic
attention. Left to continue the way it is the situation will deteriorate to a point that the
South African economy will eventually be choked. It is also clear that the situation is part
of a wider problem that encompasses an aging and inappropriate transport
infrastructure which for some time now has had a negative effect on both passenger
and freight transportation throughout the country.”
GAUTENG PROVINCE
PREVIOUS INITIATIVES
AND PARTICIPATION
FORMER INITIATIVES – PROVINCIAL
INITIATIVE NO. 1:GAUTENG TOLL ROAD STRATEGY (1997 / 1998)
•
This initiative was embarked upon as a result of the inability to
finance the freeway network in Gauteng in support of the economic
development of the province. The very same reasons that
motivated the current scheme existed in the past.
•
The Gauteng Toll Road Strategy (1998) was based on an
approach of a "network of toll roads".
•
•
•
Development of a Toll Road Network (BB5 - 1997)
Proposed Gauteng Toll Road Strategy (BB5/1 – 1998)
The above initiative was concluded by MEC Khabisi Mosunkutu
and culminated in the publication of the GAUTENG TOLL ROADS
BILL, 2003 (Notice 1880 of 2003 in the Provincial Gazette).
62
FORMER INITIATIVES – PROVINCIAL (1)
GAUTENG TOLL ROAD STRATEGY (1998) cont.
•
The Gauteng Toll Roads Bill, 2003 (GTRB) sets out the required
legal provisions for the introduction of user charges on provincial
toll roads.
•
The Bill also made provision the province to enter into an
agreement with SANRAL to act as the province’s agency to
implement of the provincial toll road network.
•
Provincial toll road strategy not implemented.
63
FORMER INITIATIVES - JOINT
INITIATIVE No. 2:GAUTENG TRANSPORT NETWORK INTEGRATION PROCESS:
PROPOSAL FOR A GAUTENG FREEWAY IMPROVEMENT SCHEME (2006)
•
A draft proposal for improving the utilisation and sustainability of Gauteng’s
freeways was developed.
•
This was a joint initiative between Department of Transport, Gauteng
Department of Roads and Transport, Municipalities in Gauteng and SANRAL
•
The most suitable funding mechanism was identified to be a user payment-based
toll scheme, with electronic fare collection as a basis to ensure free traffic flow.
•
The proposed toll scheme comprised of a combination of existing road network
capacity expansions and the development of new freeways.
•
The scheme was designed to open up the corridor design of the Gauteng
Freeway system in order to give more options to the road user and to provide
multiple routes to any single destination as part of a network.
•
Detailed work was conducted to determine the feasibility to implement dedicated
HOV or public transport lanes on the GFIP network
64
FORMER INITIATIVES – PROVINCIAL (2)
INITIATIVES No.3:GAUTENG ROADS DEVELOPMENT PLAN (2006) -1
•
The Gauteng Roads Development Plan is one of a number of national
and provincial strategies [e.g. Strategic Agenda for Transport (2005)],
providing for the sequential development of a comprehensive transport
system capable of meeting present and future needs.
•
This Gauteng Roads Development Plan together with the Draft Gauteng
Public Transport Strategy and the Draft Gauteng Freeway Improvement
Strategy, jointly formed part of Gauteng Provincial Government ’ s
response to the transport needs and challenges of the Province.
•
Proposals on the Gauteng Freeway Improvement Scheme, is the GPG’s
response for the implementation of the proposals as contained in the
GAUTENG TRANSPORT NETWORK INTEGRATION PROCESS:
PROPOSAL FOR A GAUTENG FREEWAY IMPROVEMENT SCHEME
(June 2006)
65
FORMER INITIATIVES – PROVINCIAL (3)
INITIATIVES No. 3:- :GAUTENG ROADS DEVELOPMENT PLAN (2006) -2
• Gauteng Roads Development Plan (2006) identified the Top Twenty Class 1
(provincial freeways) as the bases for the freeway improvement programme.
• This document echoed the contents of the Inter Governmental Committee
report of 2006.
• The Gauteng Roads Development Plan (2006) was accepted by EXCO
under MEC Ignatius Jacobs in August 2006 indicating that a toll road
scheme be the preferred funding option through Private Project Financing.
66
FORMER INITIATIVES – PROVINCIAL (4)
INITIATIVES No. 3:GAUTENG ROADS DEVELOPMENT PLAN (2006) -3
On 21 November 2006, the Gauteng Provincial Government announced the
following by way of then MEC for Finance and Economic Affairs, Paul
Mashatile:
67
CURRENT INITIATIVES - PROVINCIAL
• The Gauteng Province developed the Gauteng Integrated
Transport Master Plan (ITMP 25), (November 2013) which is
a 25 year plan to enable the Department of Roads and
Transport to regulate, plan and develop an efficient and well
integrated transport system. Several references to the GFIP
and the importance of the user pay mechanism in financing the
ITMP is made. Underneath are a few extracts from the ITMP
(emphasis added):
– “All the roads listed in the further phases of the GFIP project have been
highlighted in the various planning documents as priority routes and vital for the
further development of the Gauteng Province. ......The implications of the
significant delay of the implementation of the further phases of the GFIP project
has major implications for the Gauteng Province as both the GDRT and the
Metropolitan, District and Local Councils relied on the GFIP network as the
backbone mobility road network of the province.”
68
CURRENT INITIATIVES – PROVINCIAL (1)
–
“The need for the implementation of the proposed further
phases of the GFIP road is essential to reduce the logistics
cost of the province and to provide the road infrastructure
required for the optimal functioning and growing of the
province.
Irrespective of whether the freeway road
network will be funded through Road User Charges or
through the normal fiscus it is important that the detail
planning and Environmental Impact Assessment of the
following roads be undertaken to be able to start with
construction when funding is available. It is thus
recommended that between the Provincial Government
and SANRAL the detailed design and EIA of the following
road links be undertaken:”
69
CURRENT INITIATIVES – PROVINCIAL (2)
• “5.3.6 Widen the “User pay” principle
– Transportation infrastructure users are willing to pay as long as they receive a
high quality service in return. It is, however, important that any future road pricing
scheme must ensure that the revenues collected are channelled exclusively
back into the transport sector. ..... The following additional transportation
financing sources should be considered:
– Levying of tolls should be part of a holistic approach to road financing and has a
role to play in a province such as Gauteng. Alternative funding instruments
should be investigated and developed to finance public transport.
– It is preferable to introduce a mechanism that is based on Time, Distance and
Place (TDP) of vehicle movements. The privacy concerns of road users should
be addressed that limit the application of innovative new means of road user
charging enabled by GPS. .... Introducing a new transportation infrastructure fuel
levy would be the easiest to introduce. A Fuel Levy is, unfortunately, not
considered as an equitable solution as all South African citizens will have to pay
for infrastructure in Gauteng, and fuel consumption does not represent the full
structural, congestion and environmental impact of the cost responsibility of
especially heavy vehicles.”
70
GAUTENG PROVINCE ISSUES WITH THE GFIP
IMPLEMENTATION MODEL
• Wanted an SPV to be created consisting of:
– Gauteng Province
– Metros
– SANRAL
– Private sector
• Comment:
– Only SANRAL had legislation to implement toll roads
– Gauteng Province attempted to implement their own toll
legislation since 1998
– The creation of such an SPV required supporting legislation
– Deliberations resulted in using existing SANRAL legislation
GAUTENG PROVINCE ISSUES WITH THE GFIP
IMPLEMENTATION MODEL (1)
• Wanted toll revenues to be shared by SPV members
(Province, Metros, SANRAL and Private sector)
• Comments:
– Revenue sharing, over and above the required toll
tariffs to cover debt, capital cost, maintenance cost
and operational cost would have resulted in
higher toll tariffs
– Not aligned with the principle that toll revenue only
applied to declared toll road – cannot be used to
cross-subsidise other infrastructure
GAUTENG PROVINCE ISSUES WITH THE GFIP
IMPLEMENTATION MODEL (2)
• Wanted toll revenues to be used to improve public transport
• Comments:
– This principle was supported and was part of the initial
recommendations of the Inter-Governmental Committee
– Such a contribution would have resulted in an increase in the toll tariff
– Would require legislation to allow for this
– In view of the increased capital expenditure towards public transport
by the DOT and National Treasury, it was decided to exclude such a
contribution (from toll revenue) to public transport
– It was further decided to promote the use of public transport through
toll tariff structuring (discounts for public transport vehicles).
GAUTENG PROVINCE ISSUES WITH THE GFIP
IMPLEMENTATION MODEL (3)
•
•
Wanted new freeways to be implemented from onset
Comments:
– The scheme, as determined by the Inter-Governmental Committee always
included the construction of approximately 150 km of new freeways
– Detailed financial modelling was conducted to determine if it was affordable from
the onset of the project – it was demonstrated that it was not feasible from onset
– It was agreed to apply a phased approach to implement the road network.
Preparatory work for entire road network would continue to design, obtain
environmental approvals, finalise land acquisition, etc in order to be ready to
implement once these routes are required
– It should be noted that the estimated lead time for the above activities is
approximately 5 years before construction can commence
– A schedule of priorities/phases were agreed between the province and SANRAL.
GAUTENG PROVINCE ISSUES WITH THE GFIP
IMPLEMENTATION MODEL (4)
• The Gauteng Province did agree that the GFIP project be
implemented in its current format
• On 2 April 2008, the Gauteng Province and SANRAL agreed as
follows:
•
•
•
•
BACKGROUND: APPROVAL
PROCESSES/CONSULTATION
Inter-governmental (all spheres) workgroup agreed project
principles (National, Provincial, Metropolitan and District).
Resulted in report titled: “Gauteng Network Integration Process:
Proposal for a Gauteng Freeway Improvement Scheme”.
This report was concluded in May 2006.
Participants presented the report to their respective political
principals for acceptance.
BACKGROUND: APPROVAL
PROCESSES/CONSULTATION (1)
• Several other interactive sessions followed with metropolitan
authorities and the Gauteng Province. The project was
presented to the Gauteng Province at:
– The Gauteng Indaba (initiative of then MEC Jacobs) May
2006
– Workshop with Gauteng Province in April 2007
– Gauteng Legislature: Transport Portfolio Committee in
August 2007.
BACKGROUND: APPROVAL
PROCESSES/CONSULTATION (2)
• Interaction with metropolitan councils:
– City of Johannesburg
– Tshwane
– Ekurhuleni
• Part of inter-governmental workgroup
• Several presentations to portfolio committees
• Participating in cluster meetings related to the traffic and toll
studies.
BACKGROUND: APPROVAL
PROCESSES/CONSULTATION (3)
• Since 2006, the media reported actively w.r.t. the proposed
GFIP
• Television, radio and printed media reported the proposed
50c/km (March 2007)
• Many media articles reflect the extent of the GFIP and
expected toll tariff.
79
BACKGROUND: APPROVAL
PROCESSES/CONSULTATION (4)
• Project was presented several times to the Portfolio Committee of
Transport in the National Assembly.
• Mid 2007, the Department of Transport submitted the project to the
National Cabinet.
• Cabinet approved the implementation processes of the project.
• For the purposes of the cabinet submission, a toll tariff (2007 Rand)
of 50c/km for light vehicles was indicated.
• Minister of Transport publicly announced the project on 8 October
2007 – toll tariffs above, after which the toll declaration process
commenced.
80
BACKGROUND: APPROVAL
PROCESSES/CONSULTATION (5)
•
•
•
•
Nedlac: In 2007, the then DG of Transport presented the project to Nedlac (Further
presentations followed in 2011)
In October 2007, the Notices of Intent advertisements were published in the
Government Gazette. Also published in the following regional and national news
papers:
– Star; 12 October 2007,
– Sunday Times; 14 October 2007,
– Sowetan; 12 October 2007,
– Pretoria News; 12 October 2007,
– Mail and Guardian; 13 October 2007,
– Beeld; 12 October 2007,
The closing date for representations for the general public was 14 November 2007
and 14 December 2007 for public authorities.
Similar processes were followed in April 2008 for the R21, after it was transferred by
the Gauteng Province to SANRAL, for inclusion in the GFIP
81
BACKGROUND: APPROVAL
PROCESSES/CONSULTATION (6)
• Following these consultative processes, a final report with all
comments received and mitigation proposed, was submitted to the
Minister of Transport for his consideration.
• In March 2008, the Minister declared the GFIP roads as toll roads.
• Construction commenced thereafter.
• February 2011 set as the date for toll commencement.
82
EVENTS SINCE FEB 2011
REVIEWS: CURRENT GFIP
• Background: In 2007, the Minister of Transport indicated that the
basis for determining the toll tariffs at each tolling point was 50c/km
without discounts (March 2007 Rand).
• In February 2011, SANRAL announced the proposed toll tariffs for
the GFIP:
– The full tariff for light vehicles announced in February 2011 was based on
66c/km (equates to 50c/km in March 2007)
– The e-tag tariff for light vehicles amounted to 49,5c/km (25% discount).
• Other discounts were also introduced:
– Time of day discounts, reducing the toll tariff applied for defined time period
outside peak travel hours;
– A special discount for qualifying commuter public transport vehicles; and
– A frequent user discount regime for light vehicle users.
EVENTS SINCE FEB 2011
REVIEWS: CURRENT GFIP (1)
National Steering Committee :
• In light of the public outcry to the proposed GFIP Toll Tariffs and following a
meeting between the Minister of Transport and the Gauteng Premier, it was
agreed that a consultative process be embarked upon with a view to addressing the
affected stakeholder concerns.
• It was decided to determine if there are options to reduce the toll tariffs
84
EVENTS SINCE FEB 2011:
STEERING COMMITTEE (2)
• The Minister of Transport announced the Steering Committee on 7
March 2011:
EVENTS SINCE FEB 2011:
STEERING COMMITTEE (2)
• Between 24 March and 6 April 2011, several engagements
were held with stakeholders, to afford them the opportunity to
make representations. Stakeholder included BUSA, Road
Freight Association, Retail Motor Industry, SAT SA, Afriforum,
JHB Business Chamber, SALGA, AA, SA Road Federation,
DA, Solidarity, SACP and Freedom Front (FF), ANC Youth
League, COSATU, National Taxi Alliance, Mamelodi Commuter
Forum, SA Commuter Organisation and Ekurhuleni
Metropolitan Municipality.
• The public was also invited to make submissions during this
period.
• The steering committee investigated the proposals made, as
well as all other options to revise the toll tariffs.
EVENTS SINCE FEB 2011:
STEERING COMMITTEE (3)
•
•
•
•
Following the Steering Committee proceedings revised tariffs were announced
in August 2011 by Cabinet as follows:
- the 66 c/km tariff (VLN ) for light vehicles was reduced to 58c/km,
– a 30% e-tag discount was offered, reducing the e-tag tariff to 40c/km.
– the ratios for determining heavy vehicle toll tariffs were reduced which
resulted in much improved tariffs for these vehicles. It was changed from
1:3:6 to 1:2.5:5.
In addition, and demonstrating the commitment to the promotion of public
transport, Cabinet also announced a complete exemption from the payment of
toll tariffs by qualifying commuter public transport vehicles.
These tariff reductions and discounts were achieved as a result of an increased
debt repayment period
It should be noted that as SANRAL does not make a profit from tolling - there
was no option to reduce toll tariffs by reducing any profit margin
EVENTS SINCE FEB 2011:
STEERING COMMITTEE
•
•
•
•
•
In November 2011, the Gauteng legislature conducted public petition hearings
into the tolling of freeways in Gauteng.
Further engagements were held by the SANRAL Board with Stakeholders in
January 2012.
As part of the Steering Committee processes the Gauteng Province appointed
auditors to review the financial model. The outcome of the review was that the
SANRAL financial model is correct.
National Treasury also explored further options to reduce toll tariffs.
Following these engagements, the Minister of Finance, in his budget speech
announced that Government is making an extra-ordinary allocation of R5,75
billion to further lower tariffs (increase discounts).
EVENTS SINCE FEB 2011:
STEERING COMMITTEE
•
This resulted in:
– a further reduction in the e-tag tariff from 40c/km to 30c/km (48,3% discount
to standard tariff),
– the monthly tariff for light vehicles was also capped at R550 for e-tag users,
and
– significant amendments were made to the time of day discounts for heavy
vehicles.
INTER-MINISTERIAL COMMITTEE (IMC)
• In April 2012, an interim interdict was obtained by OUTA to
prevent SANRAL from commencing with tolling
• Cabinet appointed an Inter Ministerial Committee to interact
with stakeholders under chairmanship of the then Deputy
President.
Included Min of Transport, Finance,
Environmental Affairs, Public Enterprises.
INTER-MINISTERIAL COMMITTEE (IMC 1)
• Numerous engagements took place, addressing some of the stakeholder
issues. These engagements took place with Business, Labour and the
community and included engagements with SAVRALA, OUTA, COSATU,
Fedusa, Black Business Council, SA Council of Churches, National
Interfaith Council of Religious Leaders, BUSA, Road Freight Association.
• Following the proceedings of the IMC, monthly toll caps were introduced for
all classes of registered e-tag users. These toll caps are R250 for motor
cycles, R450 for light vehicles (reduced from R550), R1 750 for medium
heavy, and R3 500 for large heavy vehicles.
• From 2012 to 2013, the DOT, National Treasury and SANRAL engaged with
the public at public meetings, as well as through the advertising of the toll
tariffs and regulations for public comment.
• In September 2013 the SANRAL Amendment Act was signed into law.
• The final toll tariffs were published in the Government Gazette by the
Department of Transport in November 2013 .
GFIP/TOLL CONSULTATIONS/EXECUTIVE
PROCESSES/APPROVALS - SUMMARY
• 1998 – Gauteng Province Toll Roads Programme – first
concept of tolling Gauteng freeways
• 2002 – Platinum toll open. It includes urban tolling as well as
electronic toll collection (Auto lanes)
• 2006 – Inter Governmental Committee – agreed GFIP and
toll funding mechanism – various presentations to all
participants (legislature, councils) – acceptance by decision
makers
• 2007 – Cabinet acceptance of project
• October 2007 – Public announcement of GFIP, tolling and
50c/km toll tariff by Minister of Transport
• October 2007 to March 2008 – Toll declaration process in
terms of SANRAL Act – GFIP routes declared as toll roads
where after construction commenced.
92
GFIP/TOLL CONSULTATIONS/EXECUTIVE
PROCESSES/APPROVALS - SUMMARY
• February 2011 – Announcement of Toll Tariffs & discounts for
GFIP; aligned with 2007 indicative tariff, however public/media
outcry
• February 2011 – Steering Committee appointed by Minster of
Transport and Gauteng Premier; Extensive stakeholder engagement;
Report with revised tariffs & discounts (August 2011)
• August 2011 – Cabinet announced revised tariffs & discounts as
well as exemption of commuter public transport
• February 2012 – Minister of Finance announced improved
discounts (R5,75 billion special appropriation)
• June 2012 – Cabinet appointed Inter Ministerial Committee (IMC)
under chairmanship of Deputy President.
Direct stakeholder
consultation – Further improvement of discounts and monthly toll
caps for registered e-tag users
93
TOLL TARIFF HISTORY MONTHLY TOLL PAYABLE
Class
2011
Tariff
Announcement
2011
Tariff
after
Steering
Committee
2013
Tariffs as
Gazetted
Base Tariff for light
vehicles (Class A2)
66 c/km
58c/km
58c/km
Class A1
E-tag Tariff
(Motor Cycles)
30c/km
24c/km
18c/km
Class A2
E-tag Tariff
(Light vehicles)
49.5c/km
Class B
E-tag tariff
(Medium Heavy)
R1.49/km
Class C
E-tag Tariff
(Large Heavy)
R2.97/km
40c/km
R1.00/km
30c/km
75c/km
Monthly toll cost for light
vehicles if registered with e-tag
Category
Actual %
Less than R100 p/m
78.58%
Between R101 and R200
12.38%
Between R201 and R300
5.01%
Between R301 and R400
2.33%
Between R401 and R450
0.64%
Verified by auditors
R2.00/km
R1.50/km
94
COURT CASES
Urgent Application by OUTA to Gauteng High Court (March 2012)
• On 23 March 2012 the Opposition to Urban Tolling Alliance
("OUTA") and others approached the Pretoria High Court on an
urgent basis for an interim interdict restraining the South African
National Roads Agency SOC Limited ("SANRAL") from levying and
collecting tolls on the GFIP toll roads pending the final
determination of their application to review and set aside the
decisions of (a) SANRAL and the Transport Minister to declare the
GFIP toll roads; and (b) the Director-General to grant certain
environmental approvals related to the GFIP.
• Judge Prinsloo on 28 April 2012 issued an interim interdict
prohibiting SANRAL from levying and collecting toll on the GFIP
toll roads pending a review by the High Court of the
aforementioned decisions.
COURT CASES
Appeal Against Interim interdict to Constitutional Court (August 2012)
On 15 August 2012, National Treasury led an urgent appeal of the High Court
decision to the Constitutional Court.
The Constitutional Court delivered its judgement in this matter on
20 September 2012. This judgment was delivered against the backdrop of the
undisputed fact that –
"… Tolls are a revenue collection mechanism to fund the road upgrades.
The National Executive Government has adopted the funding policy that
revenue should be garnered from motorists who use the upgraded
roads…." (See paragraph 56 of the Constitutional Court judgment)
COURT CASES (1)
Appeal against interim interdict to Constitutional Court (August 2012)
The Constitutional Court sought, in its judgement, to address the question of separation
of powers. In this regard the Constitutional Court held that –
"Thus, the duty of determining how public resources are to be drawn upon and
re-ordered lies in the heartland of Executive Government function and domain.
What is more, absent any proof of unlawfulness or fraud or corruption, the power
and the prerogative to formulate and implement policy on how to finance public
projects reside in the exclusive domain of the National Executive subject to
budgetary appropriations by Parliament." (See paragraph 67 of the Constitutional
Court judgement)
The Constitutional Court further addressed the dire consequences of preventing
SANRAL from performing its statutory duties.
The Constitutional Court therefore proceeded to set aside the interim interdict granted
by Prinsloo J on 28 April 2012.
COURT CASES (2)
Review of GFIP toll declaration – Gauteng High Court (November 2012)
In November 2013 Vorster AJ, proceeded to hear a review against the
decisions taken to declare the GFIP toll roads and to grant certain
environmental approvals related to the GFIP.
The Court found that with regard to section 27(4)(a)(i) and (ii) and section
27(4)(b)(i) of the SANRAL Act it –
"… is clear that it is the physical aspects of the proposed toll road declaration
and particularly the situation of the proposed toll plazas which are open for
comments and representations by interested and affected parties including
municipalities and the Premier of the relevant Province and no more." (See
paragraph 9.2 of the Review Court's judgement)
COURT CASES (3)
Review of GFIP toll declaration – Gauteng High Court (November 2012)
With regard to OUTA's contention that there was a failure to give adequate notice to
ensure proper public participation, the Court found that –
"In the instant case SANRAL acted in terms of the provisions of Section 27(4)(a)(i)
and (ii) of the SANRAL Act. That process was considered to be fair in the
circumstances by SANRAL.
With regard to OUTA's contention, that in terms of section 25 of the Constitution, tolling
is an unlawful depravation of property, the Court found that –
"There are two answers to this contention. Firstly, such depravation can only
take place unlawfully if the toll road scheme is unlawful. Secondly, the payment
of toll levies will take place in terms of an act of general application, being the
SANRAL Act. I have already concluded that the GFIP scheme is lawful and that
the toll road declarations in issue in this application have not been shown to be
reviewable on lawful grounds." (See paragraph 11 of the Review Court's
judgement)
OUTA and the other applicants' case was dismissed with costs.
COURT CASES (4)
Appeal by OUTA against Gauteng High Court Judgement in September
2013.
The Supreme Court of Appeal refused the appeal by OUTA and others. This
was ostensibly on the basis that there had been an unacceptable delay in
bringing the review application. Five years had elapsed since the impugned
decisions were taken and during those “five years things have happened that
cannot be undone”. (See paragraph 41 of the Supreme Court of Appeals
Judgement).
Subsequent to the Supreme Court of Appeal Judgement, SANRAL and the
Minister of Transport published the e-Road Regulations, the exemption notices
and the toll tariffs applicable to tolls on the GFIP toll roads. It was also indicated
that tolling of the GFIP toll roads would commence on 3 December 2013.
This resulted in two further legal challenges against tolling on the GFIP toll
roads.
COURT CASES (4)
Application by Tolhek Aksiegroep (Freedom Front) at the Gauteng High
Court in December 2013
Subsequent to the announcement that tolling would commence on 3 December
2013 an urgent application to interdict the commencement of tolling based on
the unlawfulness of the toll tariff Gazette and the Transport Laws and Related
Matters Amendment Act, 3 of 2013 ("SANRAL Amendment Act") was
launched.
The application was struck off the roll by the High Court due to a lack of
urgency and the applicant was ordered to pay the costs of SANRAL and the
other respondents.
The applicant has not sought to reinstitute these proceedings.
COURT CASES (5)
Application by the DA to Western Cape High Court (March 2014)
The DA launched an application in the Western Cape High Court, also challenging the
constitutionality of the SANRAL Amendment Act. It was contested that the SANRAL Amendment
Act was incorrectly tagged as a section 75 instead of section 76.
The Court found that –
"The Amendment Act does not intrude upon the right of provinces to legislate in the future
on any of the functional areas relied upon by the DA and does not constitute legislation on
any of those matters." (See paragraph 97 of the Western Cape High Court's Judgement).
The Court went on further to hold that –
"National Roads are not listed in either Schedule 4 or Schedule 5 [of the Constitution].
They thus constitute a residual matter falling exclusively within the legislative competence
of Parliament …" (See paragraph 98 of the Western Cape High Court's Judgement)
The application was dismissed with cost.
Constitutional Court was also dismissed.
An application to appeal the judgement in the
COURT CASES: SUMMARY
In conclusion, therefore, it is pertinent to record in relation to the legal challenges
against the GFIP toll roads that –
•the declaration of the GFIP toll roads and ultimately the tolling thereof has been
adjudicated upon by no fewer than six Courts and seventeen Judges;
•other than for Prinsloo J, (whose interim interdict pending a full review was
overturned by the Constitutional Court) all other Courts and Judges have found in
favour of the declarations and determinations by Cabinet, National Treasury, the
Minister of Transport and SANRAL insofar as it relates to the GFIP toll roads;
• the Courts have considered thousands of pages of documents and have not found
any wrong doing on SANRAL or the Department of Transport's part in declaring or
tolling the GFIP toll roads;
• as part of their consideration of the matter the Constitutional Court, the Pretoria
High Court (on the review) and the Supreme Court of Appeal considered the
arguments of OUTA and the other parties opposing tolling, regarding the amount
of toll collection and the cost of administering the system; and
103
COURT CASES: SUMMARY
• the Constitutional Court made it clear that "absent any
proof of unlawfulness or fraud or corruption, the power
and the prerogative to formulate and implement policy
on how to finance public projects reside in the
exclusive domain of the National Executive". No such
unlawfulness, fraud or corruption has been found by
any of the aforementioned Courts.
104
IN CONCLUSION
In terms of Government Policy various projects were already
implemented as part of an integrated transport system
approach
 Gautrain, together with a bus feeder system
 Bus Rapid Transit (BRT) systems with planned expansion of
the system in JHB, Tshwane and Ekhurhuleni
 Government commitment to upgrade the metro rail system
 The first phase of the Gauteng Freeway Improvement
Project (GFIP):
 Improvement of 201 km of the core Gauteng freeway
network
 Approximately 50% reduction in travel times
105
IN CONCLUSION (1)
 Open road toll system implemented with ability to:
 Charge tolls without the requirement to stop
 Charge different toll tariffs for different vehicle classes
 Incentivise travelling outside peak hours by means of a time of
day discount regime
 GFIP freeways are equipped with Intelligent Transport Systems
(ITS) which is used to detect incidents and manage it effectively.
 GFIP introduced improved incident response capability:
 Incident management vehicles
 Dedicated light and heavy vehicle towing vehicles, and
 First line medical response.
106
IN CONCLUSION
 Much more still needs to be done to ensure sustainable economic
growth and prosperity in the Gauteng Province
 Sufficient and sustainable funding for these programmes are
required.
107
THANK YOU

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