Statement by Deputy President Kgalema Motlanthe on the Gauteng Freeway Improvement Project
31 May 2012
The Gauteng Freeway Improvement Project was approved by the Cabinet in 2007 to rehabilitate and improve road infrastructure in Gauteng.
Having examined a number of options on how best to fund the infrastructure, Cabinet came to a conclusion that the user pay option was the most viable, fair and equitable. The open road tolling was found to be the most appropriate mechanism for collection of toll fees. The open road tolling allows for the collection of fees without vehicles having to stop. This system is used successfully elsewhere in the world in places like China, Chile and Singapore.
The options which were considered included among others, fuel taxes, vehicle registration/license fees and development fees.
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.
A Government Gazette in March 2008 declared our plans to change parts of
existing Gauteng freeways into toll roads, with the initial tariff set at 50 cents
per kilometer. The required period of public comment was observed and the
Minister of Transport considered comments.
Tenders were awarded by the South African National Roads Agency Limited (SANRAL) and the construction of Phase 1 of the Gauteng Freeway Improvement Project was completed in early 2011.
After the tariffs were gazetted in early 2011, public concerns were raised about the implementation of e-tolling system. Government decided to suspend the tariffs and appointed a task team to review the fee structure. The task team held public hearings where interested parties, including business and organised labour, made representations. In August 2011, Cabinet announced reduced tariffs and exemption for public transport vehicles like taxis and buses.
In February 2012, having considered further representations from interested parties and the public, government decided to allocate an amount of R5.75 billion from the national budget to further alleviate the financial burden on the consumer. This led to a further reduction of tariffs to 30 cents per kilometer for light motor vehicles and the implementation date was set for 30 April 2012.
Further benefits derived from the allocation include:
Capping of toll fees at R550 pm for light motor vehicles;
Further discounts for regular users after reaching R400; and
Off peak discounts
It is now common knowledge that the North Gauteng High Court issued an interim order against the implementation of e-tolling.
The court decision has major financial implications for South African National Roads Agency Limited (SANRAL) and the country. SANRAL borrowed R20 billion to fund the Gauteng Freeway Improvement Project based on the knowledge that it would service the debt from the revenue collected though the tolling system.
The delay in the collection of toll fees has resulted in SANRAL not being in a position to meet its contractual and financial obligations. The reality is that the roads have been built, the toll collection infrastructure is in place and the debt has to be repaid.
ALTERNATIVES TO THE TOLL ROADS
There are other alternative modes of transport and roads in and around Gauteng. They include;
Metro Rail, Metroplus express, PRASA Business Express, Buses and taxis, Gautrain
R101(Old Johannesburg/Pretoria Road), R55, R59, R511 and N14. There are also major upgrades on some of the alternative routes.
Cabinet at its meeting of 3 May 2012 reaffirmed its decision to fund the Gauteng Freeway Improvement Project through the user pay system. Cabinet further committed to ensure the viability and credibility of SANRAL and its financial sustainability.
Cabinet established the Inter-Ministerial Committee led by the Deputy President whose mandate is to;
Coordinate all work of the implementation of the project
Respond to the legal dispute
Propose short term funding solutions for SANRAL
Suggestions were made that there might have been wrong doing in the implementation of the project. The Auditor General has found that over the years SANRAL has complied with all applicable laws and regulations. The IMC would like to invite any person with any information that may suggest any form of impropriety to report such to the committee or appropriate law enforcement authorities.
Throughout this process government has demonstrated its willingness to consult, engage and listen to the views of the people on this project. The Inter-Ministerial Committee will therefore continue consultations with various stakeholders with the view to finding an amicable solution to the impasse.
We are eagerly awaiting the outcome of the Constitutional Court on the application for leave to appeal the decision of North Gauteng High Court. In the meantime government is considering introducing an additional Appropriation Bill to assist SANRAL meet its obligations in the short term.
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 countrys financial position becomes.