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Impact of Gauteng e-Tolling System on Gauteng Municipalities

and Communities

SALGA GP Chairperson

Cllr P Tau

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Contents Purpose of Presentation

Background

SALGA Mandate

Impact Analysis

Impact Assessment Outcomes

Inputs from SANRAL

Inputs from Municipalities

Conclusion & Recommendation

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Purpose

To highlight the concerns of Organised Local Government on the impact the e-tolling of the Gauteng Freeways on municipalities and the communities that they represent

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Background

Previously SALGA Gauteng has engaged in number of activities relating to etolls of the Gauteng Freeways:

• In November 2011, GPG Petition committee held public hearings on etolls;

• Presentation made to SANRAL highlighting impact of tolling on urban areas;

• Meeting held between Deputy President and Salga Chairperson;

• In November 2012, comments submitted to NDT in response to published etoll tariffs;

• In November 2012, SALGA was successful in having a Clause included in the South African National Roads Agency Limited and National Roads Act pronouncing that studies should be done;

• During 2013, SALGA GP conducted a study on the impact of the introduction of etoll;

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Employer Body

Act as an employer body representing all

municipal members and, by

agreement, associate members.

The Voice of Local GovernmentThe Voice of Local Government

Support and advise our

members on a range of issues

to assist effective

execution of their mandate.

Build the capacity of the municipality as an institution as well as leadership

and technical capacity of both Councillors and

Officials.

Lobby, advocate, protect and

represent the interest of local government at

relevant structures and

platforms.

Transform local government to

enable it to fulfil its

developmental mandate.

SALGA Mandate

Lobby, Advocate & Represent

Support &Advice

Capacity Building

Build the profile and image of

local government within South

Africa as well as outside the

country.

StrategicProfiling

Serve as the custodian of local

government intelligence and facilitate inter-municipal peer

learning

Knowledge & Information Sharing

The Voice of Local Government

SALGA MANDATE

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Role of SALGA

Outlined in the Constitution as including to:

• Represent, promote and protect interests of LG;

• Transform LG to be developmental;

• Enhance Role and Status of Municipalities;

• Represent municipalities in key IGR structures at both provincial and national level;

• Position LG at the center of cooperative governance and development;

• Deepen democracy and accountability at the local level;

• Optimize the governance system within municipalities.

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Scope of the SALGA Investigation

• Assess the extent to which tolling of the freeways to finance Gauteng Freeway Improvement Project (GFIP) will affect municipalities and municipal infrastructure.

• Assess the impact of tolling on municipal roads due to possible diversion from freeways.

• Assess the socio-economic impact on rate payers and their ultimate ability to pay for municipal services.

• Assess the impact of tolling on revenue generation capacity of municipalities, including revenue from traffic law enforcement.

• Identify alternative ways of mitigating the negative effects of tolling.

• The investigation relies on readily available information and datasets, as well as stakeholder interviews.

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IMPACT ANALYSIS

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SALGA impact analysis

The following areas were covered by the study undertaken by SALGA to determine the impact of e-tolling of the Gauteng freeways.

Quantitative: i.e. Fuel price hikes, household income & expenditure, Socio economic and spatial mobility

Qualitative : i.e. Interview with SANRAL, Interview with municipalities:

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Questions posed…

How does the municipality officially define impact in respect of the freeway tolling scheme?

What engagements has the municipality had with South African Roads Agency Limited (SANRAL) in respect of the tolling scheme?

In relation to the above engagements with SANRAL, what written submissions have been made by the municipality?

What studies has the municipality undertaken to measure the impact of the scheme?

To what extent is the freeway tolling scheme taken into account in the municipality’s integrated transport plan?

How does the municipality currently budget for road network maintenance?

What systems does the municipality use to monitor traffic flow changes, including heavy vehicles?

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QUALITATIVE IMPACT ASSESMENT• Comparison with fuel hikes June 08 – March 13

• Commune travel time and household income

• Impact on household income & expenditure

• Spatial distribution of household income dociles

• Many to many trip origins and destinations

• Perceptions on use of public transport

• Spatial development patterns

• Potential traffic diversions

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Impact Assessment Outcomes Cont…

Fig 1: Fluctuations in inland fuel price changes

Data source: StatsSA, 2012

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Impact Assessment Outcomes

Comparison with Fuel price hikes from June ’08 – March ’13

• Comparison is made between proposed toll tariffs and fuel price changes;

• R1 increase in fuel – car operating cost increase by 10c/km

• Therefore a toll tariff of R0.54/km = fuel price increase of R5.40/litre

The e-toll increases are approximately equivalent to fuel prices between June 2009 and May 2012.

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Impact Assessment Outcomes Cont…

Fig 2: Toll impact analysis in terms of household income deciles

Income deciles

Average monthly Income (Rand)

Household car ownership probability

Disposable income (Rand)

Toll expenditure as percentage of disposable income (54 cents/km)

Toll expenditure as percentage of disposable income (R450/month cap)

Decile 1 396 -1 462 3.7 -44% -31%

Decile 2 1 119 -1 028 4.8 -63% -44%

Decile 3 1 694 -898 6 -72% -50%

Decile 4 2 354 -615 7.9 -105% -73%

Decile 5 3 195 -272 10.8 -238% -166%

Decile 6 4 409 180 16.2 360% 250%

Decile 7 6 464 688 26.8 94% 65%

Decile 8 10 444 1 712 45 38% 26%

Decile 9 19 130 4 606 71.2 14% 10%

Decile 10 50 398 17 390 93.7 4% 3%

Data source: StatsSA, 2012

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Household Disaggregate Analysis

Income deciles

Average monthly Income (Rand)]

Household car

ownership probability

Disposable income (Rand)

Toll expenditure as percentage of

disposable income (66 cents/km)

Toll expenditure as percentage of

disposable income

(R550/month cap)

Decile 1 506 1.2% -589 -134% -93%

Decile 2 1 124 1.9% -366 -216% -150%

Decile 3 1 559 2.0% -291 -273% -189%

Decile 4 2 067 2.5% -243 -325% -226%

Decile 5 2 694 3.0% 13 6132% 4258%

Decile 6 3 579 6.0% 179 442% 307%

Decile 7 5 109 8.3% 660 120% 83%

Decile 8 8 149 19.1% 1 203 66% 46%

Decile 9 15 101 52.2% 1 730 46% 32%

Decile 10 47 562 82.0% 13 066 6% 4%

Fig 3: Household Disaggregate Analysis

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Impact Assessment Outcomes Cont…

Impact of e-tolls on household income and expenditure• Household are divided into income deciles, low income

(decile 1) to highest income (decile 10).

• Deficit occur up to income decile 5 implying lowest income household spend more than they earn

• Marginally affected are deciles 9 and 10 representing 20% highest income earning households.

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Development pattern in the province

Fig 4: Development pattern in the province

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Impact Assessment Outcomes Cont…

Fig 5: The relationship between commute travel time and household income

Data source: StatsSA, 2012

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Impact of Spatial Development Patterns

• The many-to-many travel pattern, together with the perceived general unavailability of public transport services, implies that network tolling leaves many travellers with no option but to pay tolls.

• Under these circumstances, tolls will not be perceived as a mobility management instrument, but rather a pure income generation tool, especially where an old pre-existing network is tolled.

• This is further exacerbated by development patterns in the province. For example, Figure shows changes in built-up area in the province for the period 1990 to 2009.

• What is evident from the figure is that most of the development has been towards the periphery of municipalities.

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Fig 6: Income distribution

Medium income group of interest.

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Who uses the GFIP network

Fig 7: Users are from many to many areas (dispersed)

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Impact Assessment Outcomes Cont…

Socio-economic and spatial mobility impact based on household travel survey

• Survey shows disproportionate relationship between average one-way journey travel times and household income.

• Travellers from high income households travel shorter period than travellers from lower income household, especially within ring road;

• Traveller from high income takes an average of 32 minutes, as compared to:

• Traveller from low income who takes an average of 75 minutes.

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Traffic distribution with no tolls on improved network

Without tolling, the GFIP has generally improved operating conditions on municipal roads

Fig 8: Traffic Distribution with no tolls on improved network

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Traffic distribution with tolling

With tolling, has some notable impact on provincial roads, as well as municipal roads, although not severe in the peak

Adding some 3% to total household expenditure in Gauteng Province

Some 7% increase in peak vehicle hours

Relative to national network vehicle km increase are 11% and 17% on provincial and municipal roads respectively

Future impact more related to land use development choices

Figure 9: Traffic Distribution with Tolling

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Relative industry impact

other minerals

coal

business

food

paper

other producers

construction

vehicle

beverage

plastics

machinery

electric machinery

footwear

leather

transport equipment

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Ratio sector input transport costs relative to input costs of the transport sector

Industries that will be impacted directly include agriculture, retail/wholesale trade, service industries and government. A more thorough study required to establish extent.

Fig 10: Relative industry impact

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Latent demand for public transport

Most travellers who do not use public transport say they do not use it because it is not available.

Fig 11 Latent Demand for Public Transport

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Demand for Public Transport

• Figure 11: summarises the main reasons disclosed by household members for not using buses, trains and minibus taxis respectively, being the primary modes of public transport in South Africa.

• The main reason common among all the three modes is the unavailability of the services at place of residence.

• is followed by preference for a car as opposed to public transport. Figures 5.5 to 5.7, in fact, show that availability, relative to other service quality attributes, is the main reason for not using public transport. This may crudely imply that if public transport was available, most of the household members would use it.

• The many-to-many travel pattern, together with the perceived general unavailability of public transport services, implies that network tolling leaves many travellers with no option but to pay tolls.

• Under these circumstances, tolls will not be perceived as a mobility management instrument, but rather a pure income generation tool, especially where an old pre-existing network is tolled. This is further exacerbated by development patterns in the province. For example, Figure 5.8 shows changes in built-up area in the province for the period 1990 to 2009. What is evident from the figure is that most of the development has been towards the periphery of municipalities.

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QUALITATIVE IMPACT ASSESMENT

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Inputs from SANRAL

A traffic monitoring system has been put in place to quantify diversions. Indications are that after SANRAL network updates there has been net diversion to the national network prior to the tolling system becoming operational.

Most of the tolled road network users are in higher income categories. Also, most users will pay a small proportion of the maximum monthly tariff.

Very little road network capacity is being added by municipalities. This in turn puts pressure on national network, where national roads are increasingly being used for localised traffic. On the contrary, national roads are primarily provided for national/long distance traffic.

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Inputs from SANRAL Cont…

Public transport is being accommodated by exempting it from tolls. Parallel to this, treasury investments in high capacity public transport is addressing public transport backlogs.

Municipal emergency vehicles are exempted from the tolls.

Municipal traffic law enforcement will not be barred from carrying out enforcement on the tolled network and therefore their revenue from law enforcement will not be negatively affected.

If toll tariffs are set too low, the newly added road capacity will be taken up too quickly by traffic because users will be less sensitive to the costs.

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Inputs from Municipalities

All Gauteng municipalities were consulted and their inputs are as follows:• Municipalities were all concerned on the impact of diversion to

municipal roads during the initial consultations SANRAL was requested to provide road network monitoring data, and report on the extent of traffic diversions;

• SANRAL must implement mitigation measures if it becomes evident that the scheme impacts severely on road network;

• The scheme presented an opportunity to promote public transport and integrated transport planning and management;

• There were concerns on the impact on businesses and rate payers within the jurisdiction of municipalities.

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Inputs from Municipalities Cont…

• Recommendations were made to SANRAL for inclusion of new lanes on the road network which must be in the form of dedicated High Occupancy Vehicle lanes.

• At the time of the interviews none of the municipalities had incorporated GFIP in their Integrated Transport Plans (ITPs). Legally, ITPs are supposed to be the only instruments through which municipalities make formal interventions in their respective transport system and budget accordingly.

• It is difficult to conclusively estimate the likely impact of diversions. This is because most of the travel data in the province is available only for the morning peak period, and also very little origin-destination data exists for heavy vehicles. Additional surveys would need to be carried out to be able to estimate the probability of diversions.

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CONCLUSION

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Shortcomings of the DOT impact analyses

• Public engagement was relatively low key. For example, only 82 representations were received for the toll declaration process in 2007 (Department of Transport, 2012).

• The assessments did not explicitly take into account the historical socio-political context of the urban region, including the travel patterns of different income groupings.

• The analyses were undertaken at a highly aggregate level, for example, affordability was assessed at the level of regional GDP as opposed to disaggregate household income and expenditure patterns.

• Alternative mobility solutions were not considered for the long term given that the road capacity provided is still likely to be exceeded at some stage in the future.

• The costs of secondary road impact were not explicitly quantified and taken into account in the cost: benefit analyses.

• The quantification of the impact of road traffic accidents that may be caused by diverting traffic were not assessed, given that the secondary road network was built with less stringent geometric and overall quality standards than the primary network.

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Conclusion & Recommendations

• The SALGA study shows that municipalities have been concerned with the impact of e-tolling the Gauteng freeways and communicated this to SANRAL

• Tolling has increased traffic on municipal and provincial roads.

• The e-tolls will impact mostly on the poor and the high income group will be the least impacted

• From the graphic presentation shown it is clear that e-tolling of the Gauteng freeways has a negative socio-economic impact.

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Conclusion & Recommendations

Based on the analysis it is important that the following be taken into consideration:• Consider the impact of the e-tolls on communities based on the the spatial

development patterns in the province.

• Overhaul the funding model for transport infrastructure and services and introduce funding options to fast-track sustainable transport interventions;

• Integrated transport planning and management should be implemented;

• Processes to establish the impact of current diversion onto municipal roads should be instituted together with methods to ameliorate the impact once it is found that the diversions have a significant impact on municipal infrastructure and transport operations;

• A need to indicate an acceptable  methodology for planning and implementing open road tolling; and

• Consider a person- and goods (freight)-based corridor capacity design as opposed to vehicle-based capacity designs.

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