Media Release
South African Road Federation (SARF)
South Africa’s roads overlooked in Mboweni’s budget
Tuesday 26 February 2019: South Africa’s 750,000-kilometre road network is one of the pillars our economy and should have featured prominently in the budget that was presented in parliament last week. This is according to Saied Solomons, President of the South African Road Federation, who says our road network is the 10th longest in the world, is worth about R2-trillion and is vital for South Africa’s economic prosperity.
“Firstly,” says Solomons, “South Africa does not have a comprehensive road funding policy. 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 himself 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.”
“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 cars 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 road use tax through the fuel levy than what their fair share of road use demands. With more electric vehicles on the horizon, the fuel levy would 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 says that Minister Mboweni highlighted the rapid rate of urbanisation in South Africa but did not stress roads as being central to dealing with it. “Two-thirds of our population live in urban areas. Gauteng is soaring beyond a population of 14-million. The number of vehicles that people own in SA has doubled since 1994 with some 40% 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 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. But a significant portion of this money goes to the legal profession without benefitting the road user. Furthermore, this levy also doesn’t consider who caused the accident. Again, this means that reckless driving has little consequence for people who drive outside of the law.”
The South African Road Federation and SABITA initiated a road funding study with Stellenbosch University in 2017, which shows that accidents cost the country millions each year. “This places an unnecessary drain on the fiscus and prevents other road priorities from being addressed,” says Solomons.
Solomons welcomes R3.5-billion allocated to SANRAL to improve non-toll roads over the next three years but he says that this is simply part of SANRAL’s mandate – to finance, improve, manage and maintain the national road network for South Africans and for the economy. “Worryingly,” he says, “this money does not address the serious backlogs in road maintenance that we have on our roads which the South African Road Federation calculated requires an additional R23.3-billion per year to address.”
Solomons adds: “I salute the Finance Minister in promoting the user-pay principle and in 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 including ordinary South Africans 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.”
Governments obtain the funds for roads mostly, although not exclusively, by way of general taxation, road user levies and charges (including the fuel levy), and other taxes. Whether or not road funds are ring-fenced, a key consideration for any government transport infrastructure policy – but specifically for roads – should be that government’s investment and road infrastructure spending be in the public interest, and that the public be confident that this is the case.
ENDS
The South African Road Federation is a not-for-profit organisation dedicated to the promotion of the road sector in South Africa. It focuses on road funding and road safety as well as training and capacity development to benefit all road stakeholders.
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