‘Tolls will add R70m to truckers’ costs’

Gauteng’s newly announced toll tariffs will cost the trucking industry a whopping R70 million a month more, a leading economist has said. And this is just an initial costing as all indications are it is set to increase dramatically as more tolls are introduced and tariffs increased. Mike Schussler of economist.co.za told FTW that the tolls came at a considerable cost to the trucking industry that would be expected to fork out R2 per kilometre – the figure approved by Cabinet for heavy-duty vehicles. Whilst this is much reduced from the R3.96 originally announced by South African National Roads Agency Ltd (Sanral) earlier this year, the toll system will see the cost of goods increase at around an average 7%, said Schussler. “There are of course different scenarios with the impact being more in some cases than in others, but we are estimating that the average increase in most goods will be in the range of about 11%. The toll system is going to cost the industry R70 million a month more,” he said. And that is being conservative. According to Gavin Kelly of the Road Freight Association, a truck operating on the Gauteng Freeway Improvement Project (GFIP) network for 70 km a day (single trip) at R2 per km for at least three trips a day will see an increase in cost of 11%, and that is after the proposed reduction. “Even if the additional lanes alleviate congestion to the extent that an additional trip could be made, the operator would need to generate a profit of R1.20 per km. With the proposed toll of R2 per km an additional trip would not be feasible,” said Kelly. Schussler warned that some operators would not be able to carry the costs. “Yes, the majority of the cost will in all probability be passed onto the consumer but the smaller operators are not going to survive this and will face severe cash flow problems and the like.” Kelly agreed saying the death of already struggling small businesses was inevitable at a toll of R2 per km. “While we welcome the reduction, we believe the toll tariffs are still too expensive,” he said. On August 10 Cabinet approved new toll tariffs for the GFIP with light motor vehicles now set to pay 40 cents per kilometre and heavyduty vehicles R2 per km. According to a spokesman for deputy minister of transport, Jeremy Cronin, the tolls will now be implemented despite calls from various stakeholders, including the RFA and unions such as Cosatu, that they are still too expensive. In a previous interview with FTW Cronin said the matter of the R20-billion debt could not be ignored and would have to be repaid, making tolling essential. “We will however review the next planned phases for the upgrading of freeways in the province to make sure that we do not have a scenario like this in future.” Cosatu, however, last week insisted the entire process be scrapped. “We have said it before – if there is no change we will take strike action,” said spokesman Patrick Craven. In a statement Business Unity South Africa said the e-toll system would introduce significant administrative and cost complexity for business that would be felt across the spectrum, with cash flow disruptions expected. Gary Ronald, spokesman for the AA, said industry was now waiting for Sanral to announce the effective date for tolling to begin. The RFA said they were of the opinion that a further reduction was possible in the toll tariff if government was willing to finance R1 billion of the Sanral costs for each of the following two years, after which the financing would reduce to R500 million for two years and the toll fees could be increased again.