DEPARTMENT OF TRANSPORT PRESENTATION TO THE GAUTENG · PDF filemawethu vilana acting director-general department of transport presentation to the gauteng etoll review panel 4 november

MAWETHU VILANA

ACTING DIRECTOR-GENERAL

DEPARTMENT OF TRANSPORT

PRESENTATION TO THE

GAUTENG ETOLL REVIEW PANEL

4 NOVEMBER 2014

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CONTENTS

• PART A – Policy, Transport issues in general

• PART B – Gauteng Freeway Improvement

Project (GFIP)

INTRODUCTION

Our presentation today is a courtesy call to you, to provide

you with the bigger picture.

To do so we will provide all the facts on:

• Policy

• Challenges

• Public Transport realities

• Road Funding

POINT OF DEPARTURE

• To implement transport solutions, funding will be required

• Economic infrastructure requires funding, ultimately all is paid directly or indirectly by citizens of the country

• Funding policy for road infrastructure cannot be reduced to finding a solution to a single project.

• When considering the current funding model of the GFIP as well as alternatives, we should consider the holistic transport funding policy and requirements of all road infrastructure in the country.

• We must ask questions about equitability, how fair is the policy to all South Africans?

• Therefore, the presentation to follow does not only discuss funding policy principles of this and future phases of the GFIP, but the overall funding policy and requirements for the country.

THE BIGGER TRANSPORT PICTURE

• Transportation consists of various modes and infrastructure components: – Road:

• Private vehicles, Public Transport, Freight, etc

• Non-motorised – Pedestrians

– Animal drawn

– Rail: • Metro, long distance passenger and freight

– Aviation: • Passengers, freight, airports

– Maritime • Harbours, freight, passengers

– Cross border trade

– Law enforcement operations

THE BIGGER TRANSPORT PICTURE (1)

• The transport sector and the mobility it confers are linked to a level of

economic output, employment and income within any national economy,

• It impacts directly on the development and the welfare of the population.

• Poor infrastructure is an obstacle to economic growth.

• South Africa faces, inter alia, twin challenges w.r.t infrastructure

– Maintain what is has (the national asset)

– Provide for the non-serviced and under-serviced communities

• Road infrastructure helps solve both long term and short term economic

problems. In short term investment in road infrastructure helps provide jobs

for low skilled workers. In long term it has a wide range of benefits e.g.

multiplier effect (creates direct, indirect and induced jobs), reduce

congestion and carbon emission, benefits business by reducing costs of

transport.


• The importance of road transport in the South African economy is obvious when considering

that:

– In 2013 Road Freight accounted for 88 % of the total freight tonnage transported in South

Africa,

– 94 % of the 35 million daily motorised person trips recorded in South Africa, are road

based,

- Vehicle ownership doubled since 1994 (5 million to more

than 10 million)


The DOT needs to ensure a sustainable transport sector that is efficient and provides economic and social opportunities and benefits that result in positive multiplier effects such as:

– accessibility,

– employment,

– Accidents, and

– additional investments.

The best road to progress is freedom's road.

John F. Kennedy


• Mobility is fundamental to and an important characteristic of economic activity as it satisfies the basic need of moving from one location to the other, a need shared by passengers and freight.

• Apart from the direct cost of congestion on the economy (hours lost, productivity and vehicle operating costs), the social impact of congestion on society is a major concern:

– Commuters spend hours to get to and from work, many leaving in the early hours of the morning and returning late at night.

– The social impact of congestion cannot be calculated in monetary value only, but manifests in the social health of families, the ability of parents to assist their children with homework, ensuring that they attend school, family time, etc.

– In addition to the social impact of congestion above, it also has a negative environmental load, which cannot be neglected.

• Anti-green economy

• Carbon emission.

TRANSPORT FUNDING POLICY

• Transport funding policy is imbedded in various policy and legislative documents

including:

– White Paper on National Transport, 1996

– Moving South Africa, 1998

– White Paper on the Commercial Ports Policy, 2002

– The National Land Transport Act of 2009 (also governing how to procure

transport infrastructure)

– National Development Plan, 2012.

• When transport systems are deficient in terms of quality, capacity or reliability, they

have an economic cost such as reduced or missed opportunities.

In 1995, the ANC government under President Mandela introduced the Masakhane

Campaign to inculcate the principle of users taking responsibility for infrastructure

development and payment of services as part of the implementation of the RDP.

President Mandela said: and I quote: “pay for what we use or else the investment will

dry up and the projects come to an end. We must ensure that we can, as a nation,

provide for the millions still without the basic services.’

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White Paper on National Transport Policy, 1996

• The user pay principle was accepted to ensure ongoing investment in road infrastructure and hence remove constraints to economic growth whilst allowing for social imperatives to be prioritised, in line with policy priorities:

– The development and maintenance of transport infrastructure in accordance with sustainable economic and development principles, within the context of a sound financial base.

– Encourage more efficient land use, correcting past imbalances and reducing travel distance and time.

– It further calls for the prioritisation of public transport over private transport

ROAD FUNDING POLICY

ROAD FUNDING POLICY (1)

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• Context

– Hardly any significant new highway road construction projects have been launched since 1986 except for those that were constructed as part of toll projects

– South Africa has been spending considerably less than half of the international benchmark for road construction and maintenance over the past decades

– Between 1980 and 2004, the public sector share in gross domestic fixed capital formation in the South African economy declined dramatically

– The estimated maintenance backlog (2014) for national and provincial roads is estimated to be R197 billion


THE NATIONAL LAND TRANSPORT ACT, 2009

• Requires that transport infrastructure must be procured in a manner that prioritises public transport, especially in metropolitan areas.

• Roads that are free at the point of use discourage investments in public transport.

• Government emphasis on public transport - over the past 5 years, expenditure on public transport infrastructure has increased on average with 19,9% annually.


NATIONAL DEVELOPMENT PLAN

• “The commission's view is that in the long term, users must pay the bulk of the costs, with due protection for poor households. The role of government and the fiscus is to provide the requisite guarantees so that the costs can be amortised over time. The state must also put in place appropriate regulatory and governance frameworks so that the infrastructure is operated efficiently. For infrastructure that generates financial returns, debt raised to build facilities should be on the balance sheets of state-owned enterprises or private firms that do the work. Guarantees should be used selectively to lower the cost of capital and to secure long-term finance. Subsidies to poor households should be as direct and as transparent as possible. Infrastructure that does not generate financial returns - such as schools or hospitals - should be financed from the budget.”

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• The bulk of funding for road transport infrastructure is still provided through the fiscus

• However, the funding policies mentioned, support the principle of direct user charges to recover capital and operations/maintenance costs directly from those that benefit from the use of that infrastructure

• The funding policy does not only focus on cost recovery, but also on achieving other objectives, i.e.: – Change in travel behaviour – distance / time when

– Promote the use of public transport

– Environmental – use of cleaner/cost effective fuels

– Urban development – reduce urban sprawl, promote densification

– Provide infrastructure much quicker

ADDRESSING SOME MISAPPREHENSIONS

• The ‘users pays principle’ is sometimes understood as Government is

renouncing its funding responsibilities.

• ALL money, whether tax or user charges, comes from the public. ALL

infrastructure is therefore funded by the public in one form or

another.

• Fiscal constraints

• Competing needs.

• The different funding methods are a way of prioritising and expediting the

delivery of road infrastructure. It is also a tool to influence driver behaviour

and travel patterns.

• The ‘user pays’ approach to infrastructure provision is a way of spreading

the cost of provision more fairly.



ADDRESSING SOME MISAPPREHENSIONS

• But the White Paper ‘users pays’ principle’ is just that: a

principle; it does not distinguish priorities for transport.

• It is a question of means and ends. ‘User pays’ is one

means of funding to meet the needs.

• The 2009 National Land Transport Act is what sets the

priorities for all transport spending – including roads.

• NLTA says infrastructure must be procured in a way that

prioritises public transport. Tolling achieves this.


• In conclusion, road funding policy

– Is determined by Government – not SANRAL

– Has wider objectives than purely the funding of infrastructure, i.e. altering travel behaviour

– Is biased towards the provision of public transport.

• For the 21 403 km National Road Network, SANRAL is the implementing agency of Government’s road funding policy.

• SANRAL does not make policy.

• SANRAL implements government’s policy.

TRANSPORT FUNDING ALLOCATION &

SHORTFALLS - ROADS

• According to COTO Document regarding road network condition and funding requirements:

– Budget required per year to sustain overall road network: R65,8 billion (no expansion, strengthening,

improvements etc.)

– Budget required per year to address maintenance backlog for the overall road network: R14,5 billion

*Note : the table below does not provide for any expansions to road networks and excludes the SANRAL toll

portfolio

% Length Cost % Length Cost Length Cost

SANRAL 11.36% 2 239 R 19 027 022 000 0.00% 0 R 0 2 239 R 19 027 022 000

Provinces - 9 22.26% 15 301 R 130 027 898 000 65.67% 94 131 R 18 826 140 000 109 432 R 148 854 038 000

Metros - 8 4.16% 1 658 R 8 290 000 000 8.48% 1 227 R 245 315 473 2 885 R 8 535 315 473

Municipalities 3.62% 1 363 R 4 089 000 000 28.54% 86 245 R 17 249 009 106 87 608 R 21 338 009 106

Total Backlog 20 561 R 161 433 920 000 181 602 R 36 320 464 579 202 163 R 197 754 384 579

Strengthening/Regravel Backlog: Roads in Poor to Very Poor Condition (2013)

AuthorityTotalGravelPaved

TRANSPORT FUNDING ALLOCATION &

SHORTFALLS – ROADS (1)

National Treasury already reallocates more than the current fuel levy to

transport requirements.

Accordancing to COTO Document :

• To only address the network sustaining maintenance needs of

R65,8 billion per annum will require an additional R1.00 per litre of

fuel - in other words average fuel levy of R3.17 per litre

• To address the remainder of the strengthening (5 years) and

regravel (10 years) not addressed as part of the sustain allocation

above, and gravel road surfacing backlog will require further R0.48

per litre of fuel - in other words average fuel levy of R3.65 per litre

PUBLIC TRANSPORT PROVISION REALITIES

• Government is in full support of the promotion of public transport. Reflected in:

– Policy

– Expenditure.

• Approximately 60 % of transportation is already done via other modes than private vehicles (National Household Travel Survey 2013).

• 58% of workers leave home before 07H00 for urban areas (National Household Travel Survey 2013) – Many commuters start travelling before 04H00 in the morning to be at

work by 07H00.

PUBLIC TRANSPORT PROVISION REALITIES (1)

• The Department of Transport: – Acknowledges that Public Transport is not yet at the level of a fully accessible

and integrated public transport system, due to a historic lack of investment and which is being rectified.

– Presented that various public transport alternatives are currently in place, and have been improving over the past 5 years, for both daily commuters and private car users.

– A culture of private car usage renders the existing alternatives ineffective with insufficient demand warranting improvements and expansion of these services on typical road user routes.

– However, millions of commuters are dependent daily on train, bus and taxi services currently operated in Gauteng Province.

– Issue is to improve standard of public transport services.


• Various Government investment allocations, plans and projects are being rolled out as a firm commitment to the improvement, development and expansion of the current public transport network over the next 5 years

– The modernisation of rail commuter services (R53 bn)

– Approximately R13 bn earmarked for Bus Rapid Transport expansions in Gauteng.

• The establishment of a single Transport Authority in Gauteng is far advanced to co-ordinate, promote and plan improved integrated public transport networks within and between the respective Metros and travel demand corridors in Gauteng.


• Various other historic and current initiatives between DOT with metros and provinces to improve public transport services & affordability are:

– Taxi recapitalisation

– Gautrain: 55 000 passenger trip per day on average, 5 800 of those are on the airport line. Total passengers per day is between 27 000 and 28 000.

– Metrorail (PRASA) improvements

– Public transport subsidies: total Public Transport Operational Grant (PTOG) allocation is R1. 819, 854.000 out of R4. 832,709.000 (total for country).


• South Africa has widespread city regions as a result of past policies and

lifestyle preferences.

• Effective public transport requires dense city regions.

• 87% of public transport is road based (National Household Travel survey -

2013)

– Model split: comparison 2003 to 2013 Gauteng Province only

• Train: 292 000 vs 339 000

• Bus: 192 000 vs 236 000

• Taxi: 1 328 000 vs 1 402 000

• Both capital and operational costs for public transport are largely subsidised

by Government – since full user cost recovery is too high and will negatively

impact on especially the poor.

• As a result, the provision & operations of public transport infrastructure is

expensive.

PUBLIC TRANSPORT PROVISION –

GOVERNMENT SUPPORT (BRT & Gautrain) C

ost

of

pu

bli

c tr

an

spo

rt

Service Trips/day Users/day Capital cost by

Government

Annual

operations

subsidy

Operations

subsidy per

user per trip

BRT JHB 120 000 60 000 R3,1 Billion (Phase 1A

and 1B)

R522 million R11.76 –

R15.12

Gautrain 55 0000 28 000 R28 billion R1.0 billion (in terms

of ridership

guarantee)

R60.03

average*

Service Trips/day Users/day Capital cost by

Government

Annual

operations

subsidy

Operations

subsidy per

user

GFIP More than 2

million

More than

1 million

R5,7 billion once off

National Treasury

contribution (once off to

reduce tariff)*

R0 R0

*Will reduce as ridership increases

GF

IP

*Capital funding obtained through the issuing of guaranteed and non-guaranteed bonds


• Argument is raised by some that toll roads and the user pay principle can only be implemented if sufficient public transport services are implemented

• Approximately 28 000 users (making 55 000 trips) per day on Gautrain & 60 000 users (making 120 000 trips) per day on JHB BRT

• Daily users on GFIP network – more than 1 million users doing more than 2 million trips

• Annual growth on road network – conservatively 3% - therefore at least 30 000 additional travellers per year


• Therefore to accommodate a conservative user growth scenario experienced on the

GFIP freeways only, and then accommodate that growth on public transport,

Government needs to provide the equivalent of an additional “Gautrain” every year,

or replicate the JHB BRT network every 2 years

• Still no reduction achieved in the number of current users on freeway – just to

maintain the status quo


• However, although expenditure on public transport increased dramatically over the past 10 years (R190 bn) there has not been a reduction in private vehicle usage. The National Travel Survey showed in actual fact a growth in the use of private vehicle usage.

• It is therefore unlikely that, despite the capital and operational investments made in public transport, there will be reduction in private vehicle usage in Gauteng – given the continuous growth of the province.

• As stated in the ITMP 25 document from the Gauteng Province the reality is: – That the population in Gauteng is predicted to increase from 12,2 million people to

18,7 million people in the next 25 years – That the number of peak hour trips in the province may increase from 2,2 million in

2013 to 3,89 million in 2037

• It is for this reason that the ITMP 25 is proposing not a single, but a number of integrated transport initiatives to accommodate this growth:

– Land Use Development (densification) – Public Transport Network – Freight Transport (Freight hubs) – Road Transport (Continued, sustainable province-wide road network mobility).

TRANSPORT PRICING

• A debate is required about how transport is priced -

different modes of transport are priced

• Public transport should be more attractive than private

transport, both in terms of convenience (trip time) and

pricing

• We should change concept that public transport is

only for the poor, but rather an option for all.

HOW TO MAKE TRANSPORTATION MORE EFFECTIVE

• Travel Demand Management: – Working from home

– Flexi work hours (peak spreading)

– Ride sharing – more persons per vehicle achieved through benefit provided to high occupancy vehicle (HOV lanes, road pricing)

• Intelligent Transport Systems (ITS): Utilising electronic equipment (CCTV, traffic counters, etc) to monitor traffic flow and communicate to road users in time about potential problems (Electronic signs, web, twitter, radio, etc)

• Incident management: reduce incident duration by means of improved on-road services

• Promoting the use of public transport – more persons in taxis, buses and rail.

HOW TO MAKE TRANSPORTATION MORE EFFECTIVE (1)

• Densification of cities: Higher density development

and filling up empty spaces in city regions

• Prevent urban sprawl: Determine an urban edge and

discourage development outside the edge

(Both the above will make public transport provision

and services more effective)

• Non-motorised transport (walking and cycling):

Provide safe and adequate infrastructure to

encourage walking and cycling

HOW TO MAKE TRANSPORTATION MORE EFFECTIVE (2)

• Most of these options requires some form of incentive

or associated direct cost (toll or congestion pricing)

that will make people think differently about

transportation and the way they go about making trips.

LEGISLATION

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• SANRAL is operating and managing the 21 403 km national

road network in terms of the South African National Roads

Agency Limited and National Roads Act, 1998

– National network expansion from 6 800km in 1998 to 21 403 km as from

July 2014

• In terms of the Act, SANRAL is a State Owned Entity (SOE)

• SANRAL is a classified as a Category 3A SOE:

– not allowed to make a profit

– not a business enterprise (therefore talk of SANRAL "profits"

is misplaced)

• The Minister of Transport is the sole shareholder of SANRAL

representing government

LEGISLATION (1)

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• The Act determines the sources of funding for SANRAL, and

the way in which SANRAL must report on expenditure.

• SANRAL has the following options available for funding the

maintenance and expansion of the National Road Network:

– Budget allocation received via the Department of Transport

from the fiscus

– Borrow on the capital markets : issue bonds and other

financial instruments. This debt is serviced by means of toll

payable by users benefitting from these roads (toll roads).

Two options for the implementation of toll roads are

available:

• State (SANRAL) funded toll roads

• Concessions (PPPs)

LEGISLATION (2)

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• The South African National Roads Agency Limited and National Roads

Act, 1998, Section 27 provides for the Minister of Transport to approve

any specified national road to be a toll road and may levy and collect a

toll.

• The Minister will not give approval unless the Agency:

– has given an indication of the approximate position of the toll plaza

contemplated for the proposed toll road;

– has invited interested persons to comment and make representations

on the proposed declaration and the position of the toll plaza

– has requested the Premier in whose province the road proposed as a

toll road is situated, to comment on the proposed declaration and any

other matter with regard to the toll road

– has given every municipality in whose area of jurisdiction that road is

situated the same opportunity to comment.

FUNDING OPTIONS FOR SANRAL

The following options to fund the identified SANRAL expansion projects are

available, if tolling is not available:

– Reprioritise existing non-toll allocations over 10 year period - delaying

maintenance on the old road network.

• Maintain – not expand - congested portions of network

• But will be disastrous for the remaining non toll road network

• With current baseline allocation for national roads, the national road

network would deteriorate from 11% of poor and very poor roads in

2014 to 47% of the network in poor or very poor condition by

2024

• This approach will be disastrous for road users throughout South

Africa, and thus for the economy of South Africa.

FUNDING OPTIONS FOR SANRAL (1)

• National Road Condition scenarios with and without toll

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FUNDING OPTIONS FOR SANRAL (2)

• Alternatively, road expansion projects not implemented at

all

– Mobility as one of the fundamental and important

characteristics of economic activity is compromised

– Direct cost of congestion will increase

– The social impact of congestion on society (economic

and health) is compromised.

FUNDING OPTIONS FOR SANRAL (3) • Where does toll revenue go?:

– For concessions, toll revenues are collected by the

concessionaire to recover costs for debt servicing, capital

expenditure, road maintenance, operational costs and a return on

equity.

– For state toll roads, tolls collected are directly used (ring-fenced)

for debt servicing and all other funding requirements for the toll

road network.

– The SANRAL finances are audited annually by the Auditor

General.

– No provision for “profit” is made in the SANRAL toll portfolio. All

revenue received from toll is reinvested in toll roads.

– No cross-subsidisation (toll to non toll) is permitted.

EUROPE:

•Extracts from (EU Directive 2011/76/EU):

– “The promotion of sustainable transport is a key element of any transport

policy. To this end, the contribution of the transport sector to climate change and

its negative impacts should be reduced, in particular congestion, which

impedes mobility, and air and noise pollution, which create health and

environmental damage.

– In the road transport sector, tolls calculated as distance-based charges for

the use of infrastructure constitute a fair and efficient economic instrument

to achieve a sustainable transport policy, since they relate directly to the use

of infrastructure, the environmental performance of vehicles and the place and

time of use of vehicles and can therefore be set at a level which reflects the cost

of pollution and congestion caused by the actual use of vehicles. Moreover, tolls

do not create any distortion of competition within the internal market since they

are payable by all operators.

See annexure

WHAT IS HAPPENING ELSEWHERE IN THE WORLD?

• The ability of direct user-pay charges to address congestion has internationally led to the use of road pricing in dense urban areas to reduce congestion in general and for specific times of day. Well-documented examples include:

– New York open road tolling,

– Singapore,

– the London congestion charge,

– Stockholm congestion charge,

– the “toll ring” around Oslo,

– Open road tolling projects in Melbourne, Sydney and Brisbane,

– major throughways in Santiago Chile, and

– Beijing’s expressways.

WHAT IS HAPPENING ELSEWHERE IN THE WORLD (1)

PART B: GFIP

• Transport Problem Statement

• GFIP History

• Consultation

• Tariff history

• Court Cases

In 2005:

Most freeways in Gauteng had reached their design capacity

(pavement lifespan & traffic capacity).

Peak hours were extending by 10 to 15 minutes each year.

Resulted in congestion and uneconomical use of time with increased

vehicle operating costs and carbon emissions.

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GAUTENG TRANSPORT PROBLEM STATEMENT

GAUTENG TRANSPORT PROBLEM STATEMENT

The realities that are faced in Gauteng:

The doubling of vehicle ownership since 1994.

More than a third of South Africa’s vehicle population is concentrated in the country’s smallest province.

Urban sprawl continues to expand the cities of Gauteng – it is expensive to provide public transport infrastructure for ever expanding urban areas.

The bulk of public transport is road based (buses and taxis) - if the road network is becoming congested, it results in an ineffective public transport system.

Infrastructure provision did not keep up with growth.

Provision of this infrastructure is costly - without sustainable funding, any strategy will be ineffective.

45

GAUTENG TRANSPORT PROBLEM STATEMENT (1)

The question is how must the authorities and users of transportation,

decongest Gauteng?

To achieve sustainable mobility for the future - collaborative effort

between the authorities and transportation users will be required:

– Authorities should implement the correct strategies and related

infrastructures

– Transport users should adjust travel habits in order to achieve

success with any strategy implemented e.g. use public transport

– Objective is simple - less trips & smarter trip decisions.

Key success factor - the ability to fund the implementation of these

strategies and associated infrastructure.

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GAUTENG TRANSPORT PROBLEM STATEMENT (2)

• Low population density in metropolitan areas, compared with

international figures

• Distortion in land use development as a result of past political

policy

• Urban edge keeps expanding

• Longer distances between home and work is travelled

• More expensive to provide efficient public transport

• Provision of road infrastructure did not keep up with growth in

vehicle ownership and urban sprawl

• Average PT trip length in Tshwane: 3 x London (Jeremy Cronin

– 2012 transport budget debate)

PROBLEM WAS ALSO RECOGNISED BY OTHERS

• CSIR – 2001

• Gauteng Province – 2004

• AA - 2007

• SACCI - 2010

ECONOMIC IMPACT OF CONGESTION & INSUFFICIENT

MAINTENANCE

• CSIR Report (August 2001): Imperatives for a Toll

Freeway Network for Gauteng:

– Report drafted for the proposed unsolicited bid for freeway

improvements in Gauteng

– Highlights importance of effective & efficient transport

system for Gauteng

– Recommend tolling as value based alternative to fiscal

transfers – on the back of social demands on fiscus

– Positive macro-economic impact – reduced overall transport

costs

– Project should contribute R9b to GDP (2001 Rand)

– Create 40 000 jobs (direct & indirect)

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MAINTENANCE (1)

• Gauteng Province Report regarding impact of

congestion (2004):

– Potential loss in value added in Gauteng alone (business

development) estimate R155 billion over the period 2004 to

2025, i.e. congestion would result in a loss of income of

R155 billion to the province

– Every R1 billion spent results in nearly 9 200 (9 184) direct

employment opportunities. In addition it has a multiplying

effect of 1,6, creating therefore nearly 24 000 (23 878) job

opportunities in total

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MAINTENANCE (2)

• AA conducted tests (August 2007) :

– 1600cc vehicle travelling between Pretoria and

Johannesburg

– 122 Minutes additional driving per day (40 additional hours

per month) due to congestion

– Engines operating for longer times – 1,5l/hr when idling

– Additional 705 litres wasted (469 hrs idling) per annum –

Extra R4 935/annum (R7 per litre)

– 80 000 people – R395 m per year wasted

– Excludes working time, frustration, accidents.

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MAINTENANCE (3)

• SACCI comments (Jan 2010):

– Express concern about impact on business due to

congestion and insufficient maintenance

– Based on conservative assumptions, cost of congestion on

Ben Schoeman amounts to R15m/hour

– Excludes costs associated with:

• Fuel and maintenance

• Late freight deliveries

• Lost business opportunities

• Accident costs.

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GFIP HISTORY

BUILD-UP TO GFIP

• Since late 1990s, the Gauteng Province considered tolling as an option to fund the upgrading of the Gauteng Freeways due to funding constraints. They also drafted legislation in this regard, although it was not passed in the Gauteng Legislature.

• From 2000, SANRAL together with the Gauteng Province considered an unsolicited bid from the private sector to upgrade certain freeways and apply a toll to the upgraded sections. This bid was found not to be feasible and was not further explored.

• In 2005, SANRAL presented to the Minister of Transport a scheme to upgrade and expand the freeway network in Gauteng.

• The Minister of Transport required the proposal to be further evaluated and an inter-governmental (National, Provincial, Metropolitan and District Municipalities in Gauteng) workgroup was set up to determine and agree project principles.

• The Department of Transport was chairing this workgroup.

BUILD-UP TO GFIP (1)

• The proceedings of the inter-governmental workgroup resulted in

a report titled: “Gauteng Network Integration Process: Proposal for

a Gauteng Freeway Improvement Scheme”. This report was

concluded in May 2006.

• The report concluded that the scheme should be further explored

with an objective to;

– improve living conditions

– ensure sustainable economic growth in the Gauteng province,

and

– To reduce traffic congestion and associated costs/delays to

road users.

BUILD-UP TO GFIP

(FUNDING OPTIONS) 2

• Funding Options Considered for GFIP by the intergovernmental

committee (2006 report):

– Fuel Taxes - South Africa had a “dedicated fuel fund” in the past that

ring-fenced funds for road projects. However, the levy was abolished

in 1986.

– Vehicle registration/license fees and traffic fines - income

generated and collected by provincial and local spheres of

Government. It is not necessarily available to transport authorities.

– Development impact fees - Developer contributions towards

infrastructure provision are taking place - not on a formalised,

national basis. Assist local network improvements, not freeway

development & expansion.

BUILD-UP TO GFIP

(FUNDING OPTIONS) 3

– Shadow tolling - No tolls are levied from road users under this approach. Instead the shadow tolls are paid by Government to the operator, based on traffic counts on the road, an agreed rate per vehicle/vehicle type and an agreed set of performance criteria. The option does not create a new source of funds, or from making users internalise the external costs of their travel, but rather from Government commitment to continued financial support over several years. Shadow tolls is therefore simply a way to determine usage of a facility in order to compensate the operator/funder of the facility in accordance with an agreement.

– Tolling – A user based funding mechanism for road infrastructure development. It enables the mobilisation of substantial capital funds upfront, usually through debt equity, for the construction of infrastructure such as freeways.

• Since insufficient funds were available for the implementation of the GFIP, it was agreed that the user pay principle – "tolling” should be recommended to implement the GFIP.


• The report concluded that the scheme must be based on the following principles:

– promotion of public transport and travel demand management,

– enhancing the concepts of intelligent transport systems (ITS) and road network management,

– ensuring sustainable maintenance, upgrading and expansion of the freeway network,

– the user pay principle as a financing tool for the scheme, and

– that it is implemented as a state toll scheme.

• Each member submitted the report to their respective principals.


• SANRAL was tasked to further develop the GFIP with participation of officials of the province and councils.

• Following studies were conducted:

– Social impact study,

– Economic impact study,

– Specific road improvements, and

– Traffic modelling and Toll feasibility studies.


In concluding the rationale for implementing the GFIP, the following extract from the social impact

study demonstrates why doing nothing was not an option.

“With regard to the first scenario (do-nothing) a range of negative social impacts emerge

at the socio-economic, personal, family and work levels. In this respect it is noted that

the current state of the system has an overall negative impact with regard to the time

spent by commuters travelling to and from work and pursuing their daily business. The

safety and health of these commuters is at risk and the economic implication for both

commuters caught in traffic on a daily basis and the country as a whole are

unacceptable. It is clear that the current situation is untenable and needs drastic

attention. Left to continue the way it is the situation will deteriorate to a point that the

South African economy will eventually be choked. It is also clear that the situation is part

of a wider problem that encompasses an aging and inappropriate transport

infrastructure which for some time now has had a negative effect on both passenger

and freight transportation throughout the country.”

GAUTENG PROVINCE

PREVIOUS INITIATIVES

AND PARTICIPATION

62

FORMER INITIATIVES – PROVINCIAL

INITIATIVE NO. 1:-

GAUTENG TOLL ROAD STRATEGY (1997 / 1998)

• This initiative was embarked upon as a result of the inability to

finance the freeway network in Gauteng in support of the economic

development of the province. The very same reasons that

motivated the current scheme existed in the past.

• The Gauteng Toll Road Strategy (1998) was based on an

approach of a "network of toll roads".

• Development of a Toll Road Network (BB5 - 1997)

• Proposed Gauteng Toll Road Strategy (BB5/1 – 1998)

• The above initiative was concluded by MEC Khabisi Mosunkutu

and culminated in the publication of the GAUTENG TOLL ROADS

BILL, 2003 (Notice 1880 of 2003 in the Provincial Gazette).

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63

FORMER INITIATIVES – PROVINCIAL (1)

GAUTENG TOLL ROAD STRATEGY (1998) cont.

• The Gauteng Toll Roads Bill, 2003 (GTRB) sets out the required

legal provisions for the introduction of user charges on provincial

toll roads.

• The Bill also made provision the province to enter into an

agreement with SANRAL to act as the province’s agency to

implement of the provincial toll road network.

• Provincial toll road strategy not implemented.

64

FORMER INITIATIVES - JOINT

INITIATIVE No. 2:-

GAUTENG TRANSPORT NETWORK INTEGRATION PROCESS:

PROPOSAL FOR A GAUTENG FREEWAY IMPROVEMENT SCHEME (2006)

• A draft proposal for improving the utilisation and sustainability of Gauteng ’s

freeways was developed.

• This was a joint initiative between Department of Transport, Gauteng

Department of Roads and Transport, Municipalities in Gauteng and SANRAL

• The most suitable funding mechanism was identified to be a user payment-based

toll scheme, with electronic fare collection as a basis to ensure free traffic flow.

• The proposed toll scheme comprised of a combination of existing road network

capacity expansions and the development of new freeways.

• The scheme was designed to open up the corridor design of the Gauteng

Freeway system in order to give more options to the road user and to provide

multiple routes to any single destination as part of a network.

• Detailed work was conducted to determine the feasibility to implement dedicated

HOV or public transport lanes on the GFIP network

64

65


INITIATIVES No.3:-

GAUTENG ROADS DEVELOPMENT PLAN (2006) -1

• The Gauteng Roads Development Plan is one of a number of national

and provincial strategies [e.g. Strategic Agenda for Transport (2005)],

providing for the sequential development of a comprehensive transport

system capable of meeting present and future needs.

• This Gauteng Roads Development Plan together with the Draft Gauteng

Public Transport Strategy and the Draft Gauteng Freeway Improvement

Strategy, jointly formed part of Gauteng Provincial Government ’ s

response to the transport needs and challenges of the Province.

• Proposals on the Gauteng Freeway Improvement Scheme, is the GPG’s

response for the implementation of the proposals as contained in the

GAUTENG TRANSPORT NETWORK INTEGRATION PROCESS:

PROPOSAL FOR A GAUTENG FREEWAY IMPROVEMENT SCHEME

(June 2006)

65

66


INITIATIVES No. 3:- :-


• Gauteng Roads Development Plan (2006) identified the Top Twenty Class 1

(provincial freeways) as the bases for the freeway improvement programme.

• This document echoed the contents of the Inter Governmental Committee

report of 2006.

• The Gauteng Roads Development Plan (2006) was accepted by EXCO

under MEC Ignatius Jacobs in August 2006 indicating that a toll road

scheme be the preferred funding option through Private Project Financing.

66

67


INITIATIVES No. 3:-


On 21 November 2006, the Gauteng Provincial Government announced the

following by way of then MEC for Finance and Economic Affairs, Paul

Mashatile:

67

68

CURRENT INITIATIVES - PROVINCIAL

• The Gauteng Province developed the Gauteng Integrated

Transport Master Plan (ITMP 25), (November 2013) which is

a 25 year plan to enable the Department of Roads and

Transport to regulate, plan and develop an efficient and well

integrated transport system. Several references to the GFIP

and the importance of the user pay mechanism in financing the

ITMP is made. Underneath are a few extracts from the ITMP

(emphasis added): – “All the roads listed in the further phases of the GFIP project have been

highlighted in the various planning documents as priority routes and vital for the

further development of the Gauteng Province. ......The implications of the

significant delay of the implementation of the further phases of the GFIP project

has major implications for the Gauteng Province as both the GDRT and the

Metropolitan, District and Local Councils relied on the GFIP network as the

backbone mobility road network of the province.”

68

69

CURRENT INITIATIVES – PROVINCIAL (1)

– “The need for the implementation of the proposed further

phases of the GFIP road is essential to reduce the logistics

cost of the province and to provide the road infrastructure

required for the optimal functioning and growing of the

province. Irrespective of whether the freeway road

network will be funded through Road User Charges or

through the normal fiscus it is important that the detail

planning and Environmental Impact Assessment of the

following roads be undertaken to be able to start with

construction when funding is available. It is thus

recommended that between the Provincial Government

and SANRAL the detailed design and EIA of the following

road links be undertaken:”

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70

CURRENT INITIATIVES – PROVINCIAL (2)

• “5.3.6 Widen the “User pay” principle

– Transportation infrastructure users are willing to pay as long as they receive a

high quality service in return. It is, however, important that any future road pricing

scheme must ensure that the revenues collected are channelled exclusively

back into the transport sector. ..... The following additional transportation

financing sources should be considered:

– Levying of tolls should be part of a holistic approach to road financing and has a

role to play in a province such as Gauteng. Alternative funding instruments

should be investigated and developed to finance public transport.

– It is preferable to introduce a mechanism that is based on Time, Distance and

Place (TDP) of vehicle movements. The privacy concerns of road users should

be addressed that limit the application of innovative new means of road user

charging enabled by GPS. .... Introducing a new transportation infrastructure fuel

levy would be the easiest to introduce. A Fuel Levy is, unfortunately, not

considered as an equitable solution as all South African citizens will have to pay

for infrastructure in Gauteng, and fuel consumption does not represent the full

structural, congestion and environmental impact of the cost responsibility of

especially heavy vehicles.”

GAUTENG PROVINCE ISSUES WITH THE GFIP

IMPLEMENTATION MODEL

• Wanted an SPV to be created consisting of:

– Gauteng Province

– Metros

– SANRAL

– Private sector

• Comment:

– Only SANRAL had legislation to implement toll roads

– Gauteng Province attempted to implement their own toll

legislation since 1998

– The creation of such an SPV required supporting legislation

– Deliberations resulted in using existing SANRAL legislation


IMPLEMENTATION MODEL (1)

• Wanted toll revenues to be shared by SPV members

(Province, Metros, SANRAL and Private sector)

• Comments:

– Revenue sharing, over and above the required toll

tariffs to cover debt, capital cost, maintenance cost

and operational cost would have resulted in

higher toll tariffs

– Not aligned with the principle that toll revenue only

applied to declared toll road – cannot be used to

cross-subsidise other infrastructure



• Wanted toll revenues to be used to improve public transport

• Comments:

– This principle was supported and was part of the initial

recommendations of the Inter-Governmental Committee

– Such a contribution would have resulted in an increase in the toll tariff

– Would require legislation to allow for this

– In view of the increased capital expenditure towards public transport

by the DOT and National Treasury, it was decided to exclude such a

contribution (from toll revenue) to public transport

– It was further decided to promote the use of public transport through

toll tariff structuring (discounts for public transport vehicles).



• Wanted new freeways to be implemented from onset

• Comments:

– The scheme, as determined by the Inter-Governmental Committee always

included the construction of approximately 150 km of new freeways

– Detailed financial modelling was conducted to determine if it was affordable from

the onset of the project – it was demonstrated that it was not feasible from onset

– It was agreed to apply a phased approach to implement the road network.

Preparatory work for entire road network would continue to design, obtain

environmental approvals, finalise land acquisition, etc in order to be ready to

implement once these routes are required

– It should be noted that the estimated lead time for the above activities is

approximately 5 years before construction can commence

– A schedule of priorities/phases were agreed between the province and SANRAL.



• The Gauteng Province did agree that the GFIP project be

implemented in its current format

• On 2 April 2008, the Gauteng Province and SANRAL agreed as

follows:

BACKGROUND: APPROVAL

PROCESSES/CONSULTATION

• Inter-governmental (all spheres) workgroup agreed project principles (National, Provincial, Metropolitan and District).

• Resulted in report titled: “Gauteng Network Integration Process: Proposal for a Gauteng Freeway Improvement Scheme”.

• This report was concluded in May 2006.

• Participants presented the report to their respective political principals for acceptance.


PROCESSES/CONSULTATION (1)

• Several other interactive sessions followed with metropolitan authorities and the Gauteng Province. The project was presented to the Gauteng Province at:

– The Gauteng Indaba (initiative of then MEC Jacobs) May 2006

– Workshop with Gauteng Province in April 2007

– Gauteng Legislature: Transport Portfolio Committee in August 2007.



• Interaction with metropolitan councils:

– City of Johannesburg

– Tshwane

– Ekurhuleni

• Part of inter-governmental workgroup

• Several presentations to portfolio committees

• Participating in cluster meetings related to the traffic and toll studies.



• Since 2006, the media reported actively w.r.t. the proposed

GFIP

• Television, radio and printed media reported the proposed

50c/km (March 2007)

• Many media articles reflect the extent of the GFIP and

expected toll tariff.

79



• Project was presented several times to the Portfolio Committee of

Transport in the National Assembly.

• Mid 2007, the Department of Transport submitted the project to the

National Cabinet.

• Cabinet approved the implementation processes of the project.

• For the purposes of the cabinet submission, a toll tariff (2007 Rand)

of 50c/km for light vehicles was indicated.

• Minister of Transport publicly announced the project on 8 October

2007 – toll tariffs above, after which the toll declaration process

commenced.

80



• Nedlac: In 2007, the then DG of Transport presented the project to Nedlac (Further

presentations followed in 2011)

• In October 2007, the Notices of Intent advertisements were published in the

Government Gazette. Also published in the following regional and national news

papers:

– Star; 12 October 2007,

– Sunday Times; 14 October 2007,

– Sowetan; 12 October 2007,

– Pretoria News; 12 October 2007,

– Mail and Guardian; 13 October 2007,

– Beeld; 12 October 2007,

• The closing date for representations for the general public was 14 November 2007

and 14 December 2007 for public authorities.

• Similar processes were followed in April 2008 for the R21, after it was transferred by

the Gauteng Province to SANRAL, for inclusion in the GFIP

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• Following these consultative processes, a final report with all comments received and mitigation proposed, was submitted to the Minister of Transport for his consideration.

• In March 2008, the Minister declared the GFIP roads as toll roads.

• Construction commenced thereafter.

• February 2011 set as the date for toll commencement.

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EVENTS SINCE FEB 2011

REVIEWS: CURRENT GFIP

• Background: In 2007, the Minister of Transport indicated that the basis for determining the toll tariffs at each tolling point was 50c/km without discounts (March 2007 Rand).

• In February 2011, SANRAL announced the proposed toll tariffs for the GFIP: – The full tariff for light vehicles announced in February 2011 was based on

66c/km (equates to 50c/km in March 2007)

– The e-tag tariff for light vehicles amounted to 49,5c/km (25% discount).

• Other discounts were also introduced: – Time of day discounts, reducing the toll tariff applied for defined time period

outside peak travel hours;

– A special discount for qualifying commuter public transport vehicles; and

– A frequent user discount regime for light vehicle users.

84

EVENTS SINCE FEB 2011

REVIEWS: CURRENT GFIP (1)

• In light of the public outcry to the proposed GFIP Toll Tariffs and following a meeting between the Minister of Transport and the Gauteng Premier, it was agreed that a consultative process be embarked upon with a view to addressing the affected stakeholder concerns.

• It was decided to determine if there are options to reduce the toll tariffs

84

National Steering Committee :

EVENTS SINCE FEB 2011:

STEERING COMMITTEE (2)

• The Minister of Transport announced the Steering Committee on 7 March 2011:



• Between 24 March and 6 April 2011, several engagements were held with stakeholders, to afford them the opportunity to make representations. Stakeholder included BUSA, Road Freight Association, Retail Motor Industry, SAT SA, Afriforum, JHB Business Chamber, SALGA, AA, SA Road Federation, DA, Solidarity, SACP and Freedom Front (FF), ANC Youth League, COSATU, National Taxi Alliance, Mamelodi Commuter Forum, SA Commuter Organisation and Ekurhuleni Metropolitan Municipality.

• The public was also invited to make submissions during this period.

• The steering committee investigated the proposals made, as well as all other options to revise the toll tariffs.



• Following the Steering Committee proceedings revised tariffs were announced

in August 2011 by Cabinet as follows:

- the 66 c/km tariff (VLN ) for light vehicles was reduced to 58c/km,

– a 30% e-tag discount was offered, reducing the e-tag tariff to 40c/km.

– the ratios for determining heavy vehicle toll tariffs were reduced which

resulted in much improved tariffs for these vehicles. It was changed from

1:3:6 to 1:2.5:5.

• In addition, and demonstrating the commitment to the promotion of public

transport, Cabinet also announced a complete exemption from the payment of

toll tariffs by qualifying commuter public transport vehicles.

• These tariff reductions and discounts were achieved as a result of an increased

debt repayment period

• It should be noted that as SANRAL does not make a profit from tolling - there

was no option to reduce toll tariffs by reducing any profit margin


STEERING COMMITTEE

• In November 2011, the Gauteng legislature conducted public petition hearings

into the tolling of freeways in Gauteng.

• Further engagements were held by the SANRAL Board with Stakeholders in

January 2012.

• As part of the Steering Committee processes the Gauteng Province appointed

auditors to review the financial model. The outcome of the review was that the

SANRAL financial model is correct.

• National Treasury also explored further options to reduce toll tariffs.

• Following these engagements, the Minister of Finance, in his budget speech

announced that Government is making an extra-ordinary allocation of R5,75

billion to further lower tariffs (increase discounts).


STEERING COMMITTEE

• This resulted in:

– a further reduction in the e-tag tariff from 40c/km to 30c/km (48,3% discount

to standard tariff),

– the monthly tariff for light vehicles was also capped at R550 for e-tag users,

and

– significant amendments were made to the time of day discounts for heavy

vehicles.

INTER-MINISTERIAL COMMITTEE (IMC)

• In April 2012, an interim interdict was obtained by OUTA to

prevent SANRAL from commencing with tolling

• Cabinet appointed an Inter Ministerial Committee to interact

with stakeholders under chairmanship of the then Deputy

President. Included Min of Transport, Finance,

Environmental Affairs, Public Enterprises.

INTER-MINISTERIAL COMMITTEE (IMC 1)

• Numerous engagements took place, addressing some of the stakeholder issues. These engagements took place with Business, Labour and the community and included engagements with SAVRALA, OUTA, COSATU, Fedusa, Black Business Council, SA Council of Churches, National Interfaith Council of Religious Leaders, BUSA, Road Freight Association.

• Following the proceedings of the IMC, monthly toll caps were introduced for all classes of registered e-tag users. These toll caps are R250 for motor cycles, R450 for light vehicles (reduced from R550), R1 750 for medium heavy, and R3 500 for large heavy vehicles.

• From 2012 to 2013, the DOT, National Treasury and SANRAL engaged with the public at public meetings, as well as through the advertising of the toll tariffs and regulations for public comment.

• In September 2013 the SANRAL Amendment Act was signed into law.

• The final toll tariffs were published in the Government Gazette by the Department of Transport in November 2013 .

GFIP/TOLL CONSULTATIONS/EXECUTIVE

PROCESSES/APPROVALS - SUMMARY

• 1998 – Gauteng Province Toll Roads Programme – first concept of tolling Gauteng freeways

• 2002 – Platinum toll open. It includes urban tolling as well as electronic toll collection (Auto lanes)

• 2006 – Inter Governmental Committee – agreed GFIP and toll funding mechanism – various presentations to all participants (legislature, councils) – acceptance by decision makers

• 2007 – Cabinet acceptance of project

• October 2007 – Public announcement of GFIP, tolling and 50c/km toll tariff by Minister of Transport

• October 2007 to March 2008 – Toll declaration process in terms of SANRAL Act – GFIP routes declared as toll roads where after construction commenced.

92

GFIP/TOLL CONSULTATIONS/EXECUTIVE

PROCESSES/APPROVALS - SUMMARY

• February 2011 – Announcement of Toll Tariffs & discounts for

GFIP; aligned with 2007 indicative tariff, however public/media

outcry

• February 2011 – Steering Committee appointed by Minster of

Transport and Gauteng Premier; Extensive stakeholder engagement;

Report with revised tariffs & discounts (August 2011)

• August 2011 – Cabinet announced revised tariffs & discounts as

well as exemption of commuter public transport

• February 2012 – Minister of Finance announced improved

discounts (R5,75 billion special appropriation)

• June 2012 – Cabinet appointed Inter Ministerial Committee (IMC)

under chairmanship of Deputy President. Direct stakeholder

consultation – Further improvement of discounts and monthly toll

caps for registered e-tag users 93

TOLL TARIFF HISTORY -

MONTHLY TOLL PAYABLE

94

Category Actual %

Less than R100 p/m 78.58%

Between R101 and R200 12.38%




Monthly toll cost for light vehicles if registered with e-tag

Verified by auditors

Class 2011 Tariff Announcement

2011 Tariff after Steering Committee

2013 Tariffs as Gazetted

Base Tariff for light vehicles (Class A2)

66 c/km 58c/km 58c/km

Class A1 E-tag Tariff (Motor Cycles)

30c/km 24c/km 18c/km

Class A2 E-tag Tariff (Light vehicles)

49.5c/km 40c/km 30c/km

Class B E-tag tariff (Medium Heavy)

R1.49/km R1.00/km 75c/km

Class C E-tag Tariff (Large Heavy)

R2.97/km R2.00/km R1.50/km

COURT CASES

Urgent Application by OUTA to Gauteng High Court (March 2012) • On 23 March 2012 the Opposition to Urban Tolling Alliance

("OUTA") and others approached the Pretoria High Court on an urgent basis for an interim interdict restraining the South African National Roads Agency SOC Limited ("SANRAL") from levying and collecting tolls on the GFIP toll roads pending the final determination of their application to review and set aside the decisions of (a) SANRAL and the Transport Minister to declare the GFIP toll roads; and (b) the Director-General to grant certain environmental approvals related to the GFIP.

• Judge Prinsloo on 28 April 2012 issued an interim interdict prohibiting SANRAL from levying and collecting toll on the GFIP toll roads pending a review by the High Court of the aforementioned decisions.

COURT CASES

Appeal Against Interim interdict to Constitutional Court (August 2012)

On 15 August 2012, National Treasury led an urgent appeal of the High Court

decision to the Constitutional Court.

The Constitutional Court delivered its judgement in this matter on

20 September 2012. This judgment was delivered against the backdrop of the

undisputed fact that –

"… Tolls are a revenue collection mechanism to fund the road upgrades.

The National Executive Government has adopted the funding policy that

revenue should be garnered from motorists who use the upgraded

roads…." (See paragraph 56 of the Constitutional Court judgment)

COURT CASES (1)

Appeal against interim interdict to Constitutional Court (August 2012)

The Constitutional Court sought, in its judgement, to address the question of separation

of powers. In this regard the Constitutional Court held that –

"Thus, the duty of determining how public resources are to be drawn upon and

re-ordered lies in the heartland of Executive Government function and domain.

What is more, absent any proof of unlawfulness or fraud or corruption, the power

and the prerogative to formulate and implement policy on how to finance public

projects reside in the exclusive domain of the National Executive subject to

budgetary appropriations by Parliament." (See paragraph 67 of the Constitutional

Court judgement)

The Constitutional Court further addressed the dire consequences of preventing

SANRAL from performing its statutory duties.

The Constitutional Court therefore proceeded to set aside the interim interdict granted

by Prinsloo J on 28 April 2012.

COURT CASES (2)

Review of GFIP toll declaration – Gauteng High Court (November 2012)

In November 2013 Vorster AJ, proceeded to hear a review against the

decisions taken to declare the GFIP toll roads and to grant certain

environmental approvals related to the GFIP.

The Court found that with regard to section 27(4)(a)(i) and (ii) and section

27(4)(b)(i) of the SANRAL Act it –

"… is clear that it is the physical aspects of the proposed toll road declaration

and particularly the situation of the proposed toll plazas which are open for

comments and representations by interested and affected parties including

municipalities and the Premier of the relevant Province and no more." (See

paragraph 9.2 of the Review Court's judgement)

Review of GFIP toll declaration – Gauteng High Court (November 2012)

With regard to OUTA's contention that there was a failure to give adequate notice to

ensure proper public participation, the Court found that –

"In the instant case SANRAL acted in terms of the provisions of Section 27(4)(a)(i)

and (ii) of the SANRAL Act. That process was considered to be fair in the

circumstances by SANRAL.

With regard to OUTA's contention, that in terms of section 25 of the Constitution, tolling

is an unlawful depravation of property, the Court found that –

"There are two answers to this contention. Firstly, such depravation can only

take place unlawfully if the toll road scheme is unlawful. Secondly, the payment

of toll levies will take place in terms of an act of general application, being the

SANRAL Act. I have already concluded that the GFIP scheme is lawful and that

the toll road declarations in issue in this application have not been shown to be

reviewable on lawful grounds." (See paragraph 11 of the Review Court's

judgement)

OUTA and the other applicants' case was dismissed with costs.

COURT CASES (3)

COURT CASES (4)

Appeal by OUTA against Gauteng High Court Judgement in September

2013.

The Supreme Court of Appeal refused the appeal by OUTA and others. This

was ostensibly on the basis that there had been an unacceptable delay in

bringing the review application. Five years had elapsed since the impugned

decisions were taken and during those “five years things have happened that

cannot be undone”. (See paragraph 41 of the Supreme Court of Appeals

Judgement).

Subsequent to the Supreme Court of Appeal Judgement, SANRAL and the

Minister of Transport published the e-Road Regulations, the exemption notices

and the toll tariffs applicable to tolls on the GFIP toll roads. It was also indicated

that tolling of the GFIP toll roads would commence on 3 December 2013.

This resulted in two further legal challenges against tolling on the GFIP toll

roads.

COURT CASES (4)

Application by Tolhek Aksiegroep (Freedom Front) at the Gauteng High

Court in December 2013

Subsequent to the announcement that tolling would commence on 3 December

2013 an urgent application to interdict the commencement of tolling based on

the unlawfulness of the toll tariff Gazette and the Transport Laws and Related

Matters Amendment Act, 3 of 2013 ("SANRAL Amendment Act") was

launched.

The application was struck off the roll by the High Court due to a lack of

urgency and the applicant was ordered to pay the costs of SANRAL and the

other respondents.

The applicant has not sought to reinstitute these proceedings.

COURT CASES (5)

Application by the DA to Western Cape High Court (March 2014)

The DA launched an application in the Western Cape High Court, also challenging the

constitutionality of the SANRAL Amendment Act. It was contested that the SANRAL Amendment

Act was incorrectly tagged as a section 75 instead of section 76.

The Court found that –

"The Amendment Act does not intrude upon the right of provinces to legislate in the future

on any of the functional areas relied upon by the DA and does not constitute legislation on

any of those matters." (See paragraph 97 of the Western Cape High Court's Judgement).

The Court went on further to hold that –

"National Roads are not listed in either Schedule 4 or Schedule 5 [of the Constitution].

They thus constitute a residual matter falling exclusively within the legislative competence

of Parliament …" (See paragraph 98 of the Western Cape High Court's Judgement)

The application was dismissed with cost. An application to appeal the judgement in the

Constitutional Court was also dismissed.

COURT CASES: SUMMARY

103

In conclusion, therefore, it is pertinent to record in relation to the legal challenges against the GFIP toll roads that – •the declaration of the GFIP toll roads and ultimately the tolling thereof has been adjudicated upon by no fewer than six Courts and seventeen Judges; •other than for Prinsloo J, (whose interim interdict pending a full review was overturned by the Constitutional Court) all other Courts and Judges have found in favour of the declarations and determinations by Cabinet, National Treasury, the Minister of Transport and SANRAL insofar as it relates to the GFIP toll roads; • the Courts have considered thousands of pages of documents and have not found

any wrong doing on SANRAL or the Department of Transport's part in declaring or tolling the GFIP toll roads;

• as part of their consideration of the matter the Constitutional Court, the Pretoria High Court (on the review) and the Supreme Court of Appeal considered the arguments of OUTA and the other parties opposing tolling, regarding the amount of toll collection and the cost of administering the system; and

COURT CASES: SUMMARY

104

• the Constitutional Court made it clear that "absent any

proof of unlawfulness or fraud or corruption, the power

and the prerogative to formulate and implement policy

on how to finance public projects reside in the

exclusive domain of the National Executive". No such

unlawfulness, fraud or corruption has been found by

any of the aforementioned Courts.

IN CONCLUSION

In terms of Government Policy various projects were already

implemented as part of an integrated transport system

approach

Gautrain, together with a bus feeder system

Bus Rapid Transit (BRT) systems with planned expansion of

the system in JHB, Tshwane and Ekhurhuleni

Government commitment to upgrade the metro rail system

The first phase of the Gauteng Freeway Improvement

Project (GFIP):

Improvement of 201 km of the core Gauteng freeway

network

Approximately 50% reduction in travel times

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IN CONCLUSION (1)

Open road toll system implemented with ability to:

Charge tolls without the requirement to stop

Charge different toll tariffs for different vehicle classes

Incentivise travelling outside peak hours by means of a time of day discount regime

GFIP freeways are equipped with Intelligent Transport Systems (ITS) which is used to detect incidents and manage it effectively.

GFIP introduced improved incident response capability:

Incident management vehicles

Dedicated light and heavy vehicle towing vehicles, and

First line medical response.

106

IN CONCLUSION

Much more still needs to be done to ensure sustainable economic growth and prosperity in the Gauteng Province

Sufficient and sustainable funding for these programmes are required.

107

THANK YOU

Documents

DEPARTMENT OF TRANSPORT PRESENTATION TO THE GAUTENG · PDF filemawethu vilana acting director-general department of transport presentation to the gauteng etoll review panel 4 november