SACCI: Scrap eTolls; demolish gantries; introduce 10c/litre petrol levy

After the long-awaited formal request to engage, official submissions on eTolls are coming in fast and furious. Today the SA Chamber of Business and Industry (SACCI) unveiled the results of its engagement with members. They have given SANRAL's eToll system a big thumbs down – primarily because of the excessive cost of recovering user payments, an apparent 40% of total receipts.  SACCI is arguing for eTolls to be scrapped, the gantries demolished and a petrol levy of between 5c and 10c a litre to fund the cost of Gauteng's improved highways. AH

ALEC HOGG: Welcome back to Power Lunch. The Gauteng Freeway Improvement Program and Infrastructure Expansion gets a nod from the South African Chamber of Commerce and Industry, in principle. We (many people in the business environment) have been waiting to see whether Sacci will come into line with what Government wants. Many people in Gauteng are positioned very strongly against eTolls. The last time we had the Financial Director of Sanral in here, and I thought she made a pretty good case. Well, I was flamed on social media as a result, so many people feel very strongly and very passionate about this subject. Pietman Roos is the Senior Policy Consultant at Sacci. I guess the principle is not hard to fight against, Pietman. It's user-pay principle. We need new roads.

PIETMAN ROOS: Absolutely. I think the nuance is user-pay principle can be introduced through a variety of ways, even through a fuel levy. The typical argument here is you need a direct tax for your usage, but fuel levy is also direct. Well, it's indirect for the rest of the country, but then you talk about the tax incidence. Whether you pay a fuel levy or whether e-toll is only implemented in Gauteng, the tax incidence will be the same for the whole country because Gauteng makes up 50 percent of the economy.

ALEC HOGG: That's a point that many people actually forget about. Gauteng is exporting capital through tax revenues to every other province. In fact, people like yourself who have done the numbers, will see that Gauteng is a big provider into the pot and KwaZulu Natal for instance, is a big taker from the national pot. That's sometimes lost in the argument about e-tolls. Where do you guys stand? What do you say on eTolls? Are you saying 'we should have them' or 'we shouldn't'?

PIETMAN ROOS: We're saying that we support user-pay. We support eTolls in principle, but the way it's been introduced shows that it cannot really work. The administrative cost is too high.

ALEC HOGG: How high is it?

PIETMAN ROOS: Well, the estimate is 40 percent of the revenue. Clearly, that's not efficient.

ALEC HOGG: Forty percent of the revenue is going to go administer this whole system.

PIETMAN ROOS: That's right. One of the first press releases from SANRAL following the implementation of eTolls said we were able to collect for example, R40-million, but it cost us R45-million to get it. Clearly, that system isn't working.

ALEC HOGG: So you're not worried about all the whispers about problems that could have been in the award of the tenders for those who are going to be administering it. You're just looking at the big picture and the big picture says it's too expensive in the way that it's currently proposed.

PIETMAN ROOS: I think… Look at the principles first and realise that South Africa has a tried and proven mechanism – the fuel levy. Increasing that by between five and ten cents will generate sufficient funds to pay for all the highways.

ALEC HOGG: So take down the gantries, put up a five to ten cent increase in the fuel price, and then we'll have more than enough money to pay for these highways.

PIETMAN ROOS: The question during yesterday's review panel was… We already made the expenditure on the gantries, but that's not the problem. The problem is if you hit your head once against the wall, do you continue doing it year after year because you did it in year one? No. Stop. We're wasting money year after year. Let's go to the efficient model and save money for the whole country.

ALEC HOGG: Pietman Roos is with the South African Chamber of Commerce and Industry, and he's the Senior Policy Consultant there.