Industry voices concern over cost of new toll roads

‘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.”