31 May 2012

South Africa: Appropriation Bill for E-Tolling to Be Introduced

Photo: Rodger Bosch/MCSA
The bill is essential to enable the implementation of the electronic toll collection system that has seen an uproar from all sectors in the country.

Cape Town — The government is considering introducing a special Appropriation Bill to help the South African National Road Agency Limited (Sanral) to meet its obligations in the short-term, the Deputy President Kgalema Motlanthe has announced.

Briefing media on Thursday, Motlanthe said Sanral had borrowed R20 billion to fund the Gauteng Freeway Improvement Project (GFIP) and the delay in the collection of toll fees had resulted in the roads agency not being able to meet its contractual obligation.

The government has lodged an appeal in the Constitutional Court over the North Gauteng High Court's judgement, which last month halted the 30 April implementation date of e-tolling.

Motlanthe said if the Appropriation Bill was passed, government may have to take away money from other allocations in the fiscus.

The Minister of Finance Pravin Gordhan said a range of funding options was being considered by the government, but added that the Appropriation Bill would give Sanral and its debtors the assurance that the government would honour the debt, particularly with an important payment Sanral was due to pay in January next year.

Gordhan said based on estimates by rating agency Moodys, Sanral could be losing about R270 million a month, or up to R500 million if one included collection fees.

He said the element of user-pay was crucial anywhere in the world - with the payment of water, electricity and telephones for example - and South Africa should not undermine this principle, if it is to develop sustainable funding mechanisms for public services.

The government had taken the view that lower income groups needed to be subsidised by the state, he said.

Motlanthe said South Africans need to clarify among themselves whether it was the issue of tolling that they were against, or that of electronic tolling (e-tolling) - pointing out that South Africa had been employing the tolling method for many years.

Turning to the court appeal over last month's e-tolling judgement, Motlanthe said the judicial process - including the appeal case - could drag on until August next year.

The government was appealing the court's judgement as he believed the judiciary had unfairly encroached on the responsibilities and authority of the executive, he said.

An inter-ministerial committee, headed by Motlanthe, is looking at how to respond to the legal dispute, co-ordinate all work related to the implementation of the project, propose short-term funding solutions for Sanral and consult with stakeholders.

"Under no condition will we say as a government that we won't want to listen to the concerns raised by citizens," he said.

"While we continue to consult, we must bear in mind that there is a public debt that needs to be repaid and the longer we take to resolve this impasse the worse the country's financial position becomes," he said.

Motlanthe said when Cabinet initially looked at how to fund the GFIP, it had examined a number of measures and had found that e-tolling was the best option.

E-tolling was preferable as it allowed for collection of tariffs and free-flowing traffic and such a system is also used successfully in China and Chile.

Other options included raising fuel taxes, vehicle registration licenses and development fees.

A R5.75 billion allocation in the 2012/13 Budget, presented by the Minister of Finance Pravin Gordhan in February, had helped to reduce tariffs from 50c per km to 30c tariff.

"The decision to implement the Gauteng Freeway Improvement Project with its chosen funding mechanism was taken after a thorough consultative process and its implementation was in compliance with appropriate legislation," he said.

As an alternative to e-tolling, the public could also make use of other public transport such as rail, minibus taxis and buses and could also make use of several alternative roads.

These include: R101 (the Old Johannesburg/Pretoria Road), R55, R59, R511 and N14 were alternative roads, with major upgrades also being undertaken on some of these alternative roads.

He said the inter-ministerial committee invited anyone with any information around wrongdoing linked to e-tolling to come forward and report these to the committee or the appropriate law enforcement authorities.

There was no harm, he said, in putting information in the public arena around the 33 companies subcontracted to Sanral for the e-tolling project.

The Minister of Transport announced at the briefing that Nazir Alli had withdrawn his resignation, at the request of himself and the South African National Roads Agency Limited (Sanral) Board.

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