The GFIP looks to improve an maintain Gauteng’s roads

Developments in Gauteng of a new toll road system, on the provinces busy highways used by many commuters to and from work have stirred a wave of questions and concerns from motorists using the highways.

Reports of excessive costs for road projects compared with international costs has also drawn concern, the effect on the cost of living will be affected with ripple effects to be seen as one sector try’s to pass the buck to the other.

Understanding the reason for the need for such a fund system is complex, what we do know is South Africa is an ever expanding country with increased housing, industrial and retail properties surfacing leaving more and more roads to be constructed and maintained. South Africa has without doubt the most advanced road network on the African continent and for that to stay funding will have to provided on an ongoing bases.

This leads into the Gauteng freeway improvement project (GFIP), which is an initiative of the South African national roads agency limited (SANRAL), the initiative is expected to inject R29Billion in to the SA economy and R13 Billion in Gauteng’s  provincial economy creating 30 000 direct jobs which is important considering the ANC pull for job creation.

Sanral CEO, Mr Nazir Alli “GFIP will allow unimpeded growth in Gauteng, while paving the way for major investment into small medium and micro-enterprise as well as black economic empowerment businesses via construction, “ He said.

The Advantages for South Africa

Gauteng is the economic heartland of South Africa which generates 38% of total value of economic activities. Once completed the initiative which consists of Johannesburg, Ekurhuleni and Tshwane metro areas will widen freeways to 4 lanes and is some areas 6 lanes, the expanded freeways looks to greatly decrease traffic on Gauteng’s major highways. This means less time spend on roads for commuters to and from work and for company’s who spend a lot of time on the roads during the day. Currently the provinces roads are just to congested leading to decreased productivity as employees spend to much time on the roads. Some motorists spend up to 3hours to and from work because of congestion.

This might also lead more people to take up the option of transport like Metrorail, bus rapid transport system (BRT), the Gautrain or set up more carpool systems. It must be said that for a province like Gauteng with its large population it makes sense for there to be a larger emphasis on using transport to work. Currently major steps are being made to make rail transport safer and cost effective which editions like the Gautrain and the business express from Metrorail.

The Gautrain price is at R39 for one trip, one way on a monthly ticket, from Pretoria to Johannesburg. MEC Ismail Vadi said they were highly competitive, comparing “favourably to the cost of a single trip between the two cities for a 1600cc car, which is R61.

Using the Gautrain bus system would cost R6 a trip for commutes using the Gautrain, and R20 for other users. The system can carry up to 110 000 or less passengers a day between Pretoria and Johannesburg. Gautrain management agency (GMA) CEO Jack van der Merwe said it’s not so much about selling train tickets, but rather a saving in time to commute between Johannesburg and Pretoria. Van der Merwe said the Gautrain was able to offer predictable travelling times between destinations regardless of weather, accidents or traffic.

Open road tolling

Open road tolling means the transactions will be conducted electronically on a strict user pay system. Motorists will be required to register as a user to obtain the transponders that are fitted in vehicles. The transponders detect movement whenever the driver passes under gantries situated approximately every 10km along the freeway network.

“Tolling remains an equitable method for motorists to pay for what they use and this means that SANRAL will be able to provide road infrastructure more promptly than having to rely on tax-based revenue capital raised via-tolls is directly returned into the specific road network” Alli said

At a proposed cost of 66 cents per kilometre for cars compared to the initial 12 cents before the project started and R3, 96 for heavy trucks, the GFIP toll fees are the highest in South Africa, situated on the busiest road network in the country.

SANRAL CEO Nazir Alli further said “These gantries are fitted with toll collection equipment that will recognise the electronic transponder (e-tag) in a vehicle and /or the vehicle number plate. Toll will be deducted from users registered e-toll account associated with the vehicle and the user will be able to travel without any disruptions”

The user pay principle in infrastructure project funding and financing should be more assessed to see how such projects are paid for. Analysis of the toll fee burden shows that the toll fees are equal to an increase of 2% in the personal income taxes of Gauteng residents, this does’ it include the consumer price effect. For commercial road freight industry the expected income from toll fees is equal to at least an increase of 10% in taxation.

Excessive construction costs

Although limited detail is available about the manner in which Sanral has determined the proposed toll fees, it is clear that the level of the toll fees had been affected by the road construction costs. It is then a cause for concern that, when compared to the international costs of highway construction, per kilometre expenditure of the GFIP seems extremely high.

Many of these international projects are green fields new, opposed to upgrade highway construction projects in countries with per capita GDP levels much lower than that of South Africa. Factors tend to decrease comparability with the GFIP. The extent to which South African costs exceed the comparative numbers, is striking.

Recent World bank financed projects from World Bank project documents show data sourced by the Washington state department of transport (WSDOT) in the United States. WSDOT compiled a database of US highway construction costs.

Land prices and construction cost levels would be expected to be higher in a developed country than in an emerging market such as South Africa. However of the GFIP comparable projects outlined by the WSDOT per kilometre construction costs averaged US $6.59 million in 2004 (or US $7.49 million in 2009 terms) he GFIP”s estimated costs are 106% higher. Sanral has stated that it expects its toll revenue to be R300 million per month.

(Source: World Bank project documents)

Most people tend to think South Africans tend to travel more by personal motor car and this trend might not stop anytime soon, even with huge price increases in toll fees. The consequences are that if motorists have to spend more on toll fess, they will cut spending on other products and services.

(Some information sourced: from the Gauteng Freeway improvement project Report for the Road freight Association and Afriforum.)

Written by: Shaun Meyer

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