Gordhan gives nod to tolling

The South African National Roads Agency SOC Ltd (SANRAL) has welcomed the measured Medium Term Budget Policy Statement tabled in Parliament yesterday.

“In these tough economic times, it was heartening to see government’s unequivocal commitment to infrastructure spending, support for a number of SANRAL projects and most importantly the principle of tolling,” said Dumisani Maluleke, Deputy Chief Financial Officer at the roads agency.

Although public attention was strongly focused on government’s response to the crisis in higher education the two recurring themes in both the Budget speech and Medium Term statement – MTBPS – were reductions in public sector spending and increased investment in physical infrastructure, including roads.

Maluleke said: “This framework is of significant importance to SANRAL because it demonstrates government’s commitment to infrastructure investment in general – and roads in particular – and offers advance indications of long-term shifts in expenditure or revenue patterns that might be in the pipeline.”

The Budget statement lists six issues which are causing “rising spending pressures” across the public finances. These range from the public sector wage bill and rising costs of health care to the depreciation of the exchange rate. However, it also singles out the issue of funding of South Africa’s road infrastructure.

Congestion is growing on the national road network and the condition of many provincial roads is deteriorating, but there is uncertainty about the funding model for expansion and maintenance.

Maluleke expressed satisfaction that the Budget statement singled out two primary SANRAL projects as examples of investment in economic infrastructure in line with the National Development Plan, namely the Moloto Road upgrade and the N2 Wild Coast Toll Road.

Funding for the N2 Wild Coast Toll Road – including the envisaged nine bridges – will be from the Budget, and importantly, “the road upgrades will be tolled.

With this the principle of the user-pays or tolling, to fund major road infrastructure projects, has been endorsed at the highest level.

The Budget statement reaches the following conclusion: “More generally, if government does not proceed with tolling to fund major freeways, difficult trade-offs will need to be confronted to avoid a deterioration in the national road network.”

Importantly, what was not said is that the e-tolls project has been cancelled.

“This is something which our country simply cannot afford. The reality is that to put an end to the project now will not only cost hundreds of jobs, but will also mean that the fiscal exposure which stood at R35-billion at the end of March 2016, will be brought to bear on an economy that is under severe pressure,” said Maluleke.