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South Africa’s roads overlooked in Mboweni’s budget

March 7, 2019

The South African Road Federation (SARF) – a not-for-profit organisation dedicated to the promotion of the road sector in South Africa – is of the opinion that South Africa’s 750 000-km road network did not feature prominently in the 2019 national budget that was presented during February.

“South Africa does not have a comprehensive road funding policy,” comments Saied Solomons, president of the SARF. “I hope that the new draft policy developed as far back as 2017 will fill this gap. Policy has to come before a budget, as the finance minister emphasised. Right now, the funding of our roads remains inherently flawed in the absence of a policy to enable a road-funding mechanism and administration that is acceptable to all stakeholders.”

Solomons adds that the nation’s road network is the tenth longest in the world, is worth about R2-trillion and is vital for South Africa’s economic prosperity.

“The fuel levy increase – by 29 cents per litre for petrol and 30 cents per litre for diesel – is a far from ideal way to finance our roads. This levy taxes the poor at the same tax rate as the rich. Those who can afford newer, more fuel-efficient vehicles are paying less to travel the same distance than those who are less well-off and drive older vehicles. Government is also losing revenue due to the continuous improvement in vehicle fuel efficiency.

“Many people are paying more than their fair share of road-use tax through the fuel levy than their road use demands,” he suggests.

Soloms adds that, in the longer term, the demise of fossil fuel needs to be accounted for. “With more electric vehicles on the horizon, the fuel levy will not be sustainable. It also does not consider road damage caused by the mass of a vehicle and, critically, it cannot be used as a tool to manage congestion during peak periods.”

Solomons continues to say that Minister Mboweni highlighted the rapid rate of urbanisation in South Africa, but did not stress that roads are central to dealing with it.

“Two-thirds of South Africans live in urban areas. Gauteng’s population is soaring beyond 14 million. The number of vehicles that people own has doubled since 1994, with some 40 percent of these vehicle owners living in Gauteng.

“With this enormous demand on our roads, the available funding for maintenance and expansion of the road network is not enough, and road users are paying more and more in terms of time, due to congestion.

“In Johannesburg and Pretoria, for example, road users are currently spending roughly 37 minutes a day in traffic, which amounts to 141 hours a year. They are also paying heavily in vehicle operating costs where roads are in poor condition.”

Solomons says that South Africa urgently needs a tariff-setting mechanism that deals with congestion, as well as bad driving behaviour, for which the fuel levy is not suitable.

“The Road Accident Fund levy remains highly problematic. In 2017, the road accident bill, according to the Road Traffic Management Corporation, was some R142 billion and escalation of this figure has occurred since then.

“However, a significant portion of this money goes to the legal profession without benefiting the road user. Furthermore, this levy also doesn’t consider who caused the accident. Again, this means that there is little consequence for reckless driving.”

The SARF and the South African Bitumen Association (Sabita) initiated a road funding study with Stellenbosch University in 2017, which shows that accidents cost the country millions each year. “Road accidents place an unnecessary drain on the fiscus, which prevents other road priorities from being addressed,” says Solomons.

Solomons welcomes the R3,5-billion allocated to Sanral to improve non-toll roads over the next three years, but says that this is simply part of Sanral’s mandate. “Worryingly, this money does not address the serious backlogs in road maintenance that we have on our roads – which the SARF calculated requires an additional R23,3-billion per year to address.”

Solomons adds: “I salute the finance minister for promoting the user-pay principle and for encouraging South Africans to pay for services and to pay their taxes. This, I hope, has set the scene to build understanding around a user-pay principle that will counter the high levels of civil disobedience we are seeing in our country.

“Ultimately, we need a completely new approach to road funding based on paying per the mass of the vehicle and the distance travelled. We need to develop a system of road pricing that varies by when, how much and where drivers use the roads. This should involve a tariff-setting mechanism that influences behaviour and helps manage road capacity.

“Public sentiment will be far easier to manage if we have a road-use charging system that is cost-effective, efficient, sustainable, equitable and well administered. Critically, charging for road use must be transparent, so that all sectors of society know that government’s investment and road infrastructure spending is in their interests.

“Finalising the draft roads policy will go a long way in sorting out our road funding challenges,” Solomons concludes.

FOCUS on Transport and Logistics is one of the oldest and most respected transport and logistics publications in southern Africa.

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