South Africa's next tolling battle

If you’ve been following the issue of tolls to fund the Gauteng Freeway Improvement Project, you’ll wonder if South African politicians would have the appetite to introduce more toll roads. After all, although tolling is meant to start on the Gauteng network by February 2012, the second phase of the project has been suspended (upsetting road contractors).

People in Cape Town are surprised that the answer is yes. The government plans to toll the N1 and N2 highways between the city and Worcester and Bot River to fund upgrades to both roads. In other words existing untolled roads will be tolled to pay for upgrades on them. People in Cape Town and the local government are opposed. The intention is to operate the toll as a 30 year concession with the upgrade costing R10 billion (US$1.26 billion).

The project covers 170kms of road and involves building around 170 culverts and bridges, widening some sections to six lanes; drilling a tunnel through Sir Lowry’s pass, and flyovers at two points on the N2 through Somerset West.

Business Day’s Cape Editor Dave Marrs says it is unjustified because “ imposing tolls on outlying commuter suburbs in the manner proposed will have a disproportionately negative effect on the poorer communities of the Cape Flats, both through direct transport costs and the knock-on effect of higher consumer good prices” and as there is little congestion on the routes, it is "difficult to justify on those grounds".

South Africa’s leading opposition party, the Democratic Alliance, is leading a campaign against the proposed toll upgrade.  The Financial Mail reports that the City of Cape Town:

declared an inter governmental dispute process with Sanral in July. It has asked that the process be halted until concerns that it has raised have been addressed.

The intention to pursue legal action, says Cape Town’s mayoral committee member for transport, roads & stormwater, Brett Herron, arose after Sanral announced the project’s preferred bidders.

The preferred bidder is the Protea Parkways Consortium, a joint venture between Group Five, Basil Read and French company Bouygues TP. 

Once the road has been upgraded, 30% of the operation and maintenance work is reserved for black companies in the first half of the 30-year concession and 80% in the second half of the concession contract according to SA Commercial Prop News.  Work is meant to begin in February 2012.

Clearly, there is a big issue.  Columns like this, which just condemn tolls, are ignorant. If tolls are a tax, then so are fares on buses and airport charges. There is no need for toll booths to collect modern tolls and the assertion about how much money it costs to collect tolls is exaggerated. The main beneficiaries of improved major highways are those using them. Those without cars shouldn’t have to pay as much as those with cars.

However, for the South African Government to have got things this wrong, indicates disenchantment with how existing motoring taxes are spent, and insufficient engagement with motorists on highway upgrades (and the tradeoffs between paying tolls and not getting improvements).   SANRAL, the South African National Roads Agency Ltd, is one of the best highways operators in the developing world.  The proposals for tolled improvements have enormous potential to secure a first class highway network for the country, but that in itself isn't enough when people don't trust the system as a whole.   As such, it may be time for South Africa to review not only its tolling policy, but its entire road taxation and charging policy.