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Industry voices concern over cost of new toll roads

03 Aug 2007 - by Staff reporter
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‘User pays’ concept to fund
Gauteng freeway project

MARK JACKSON-MOSS
Sanra l's R22bn Gauteng Freeway Improvement
Project (GFIP) has attracted mixed reaction since
it was unveiled last month. While new roads are
needed and welcomed, the looming issue of cost has
generated heated debate.
“At last,” said Road Freight Association CEO
Sharmini Naidoo of the much anticipated upgrade
of Gauteng’s roads by the SA National Roads Agency
Limited. “I welcome any investment in roads. I am
weary of Public-Private-Partnerships but if they can
work, then I support it.” But Sanral says there will be
no private sector involvement.
Sanral’s R22bn plans for upgrading Gauteng’s
straining freight and public road infrastructure cannot
predict returns for private investors, says Sanral
marketing and communications manager Wendy
Watson. Transport Minister Jeff Radebe recently
criticised a “risk-averse” private sector for shying
away from investment for the provision of road
infrastructure.
The GFIP will receive no financing from
government (despite Sanral being an agency of the
government with the transport minister as its sole
shareholder), but money will be generated through
“loans raised, and then paid for by the user through
an electronic-tag tolling system to be introduced
after 2010,” according to Alex van Niekerk, Sanral
northern region project manager.
The introduction of the ‘user-pays’ system has
broader implications, according to the RFA. “The cost
will be absorbed by the operator, who will build it
into the running costs, which are then borne by the
consumer, which will drive up inflation,” says Naidoo.
“It’s a vicious circle.”
Operators have turned to alternate routes to cut
costs, roads not built for heavy vehicles, adds Naidoo.
Watson feels the freight industry will recognise the
efficiency of using the toll roads and will shift back
to them, a view echoed by Van Niekerk. He believes
reduced transit times through the provision of tolled
“alternate routes to the same destination” as part of
the bigger-picture benefits for the freight industry will
outweigh the apparent immediate costs to businesses
under the tolling system.
“The construction of roads has a multiplier effect
on the economy despite the rising costs of transport,”
says Watson. “Preliminary studies estimate that
the economic impact of this system will contribute
R14.2bn to the GDP in 2008, and R15.3bn in 2009,
with contributions of over R6 billion to the Gauteng
GGP (Gross Geographic Product) in the same years.”

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