Pretoria – Funding for the R20 billion Gauteng Freeway Improvement Project (GFIP) is unlikely to come from an increased fuel levy.
This was confirmed by Deputy Transport Minister, Jeremy Cronin, during his plenary speech at the South African Transport Conference (SATC) on Monday in Pretoria.
“Many of those objecting to the e-tolling have argued that instead of tolling, the fuel levy should be ring-fenced for road construction and maintenance and not go into the general fiscus,” said Cronin.
He said government had several problems with pushing up the fuel levy to finance the project.
“National Treasury is in principle opposed to ring-fencing tax revenues. In their view, ring-fencing brings about inefficiencies in government spending over time, as the lack of transparency means that spending agencies lose the accountability of the budget process for how effectively they apply the funds.”
The Gauteng Freeway Improvement Project aims to tackle congestion on freeways in Johannesburg, Pretoria and Ekurhuleni, and has been the subject of a heated public debate and controversy due to the anticipated e-tolling system.
He also said the actual amount allocated out of budget for road infrastructure is substantially more than the amount raised out of the fuel levy.
“In the 2009/10 financial year, for instance, the amount that would have been available for road infrastructure from the fuel levy (had it been ring-fenced) was R22 billion, whereas the actual amount allocated to road infrastructure was R29.2 billion – a shortfall of R7.2 billion,” he said.
Cronin added that he did not want to pre-empt his Transport Minister’s announcement on the upcoming steering committee report on how toll prices could be reduced after the completion of Phase A1 of the project.
The deputy minister also questioned whether the finance raised from a fuel levy should only be invested in road infrastructure when other transport modes like rail were also in need of financing.
“Even if we were to ring-fence the fuel levy, would it not make sense to ensure that we support improved access and mobility by spending more on non-transport sectors, like transforming our land-use patterns, overcoming our unproductive and costly, sprawling, low density towns and cities?” said Cronin.
He also maintained that a taxi driver in Lusikisiki should not have to pay an increase in the fuel levy to benefit drivers in Gauteng.
Cronin also highlighted that by ring-fencing the fuel levy as the primary source of funding for roads, South Africa was increasing its reliance on hydro-carbons at a time when the country should be looking towards constructing compact towns and cities, and promoting non-motorised transport, public transport and alternative technologies.
He said that questions need to be asked about whether freeway expansion actually decreases congestion and who the beneficiaries of this project are.
“While the Phase A1 horse might have bolted, there are other horses in the GFIP stable. Now is surely the time to pause and to have a serious discussion about what exactly our strategic priorities are when it comes to major infrastructure spending,” he said.
The SATC conference, which has attracted leading international speakers from Australia, USA, Sudan, Tanzania, Oman, Kenya, Portugal, the United Kingdom and India will end on Thursday.
With this years’ conference theme being ‘Africa on the Move’, transport experts from the private and public sectors will tackle critical transport issues on the African continent through a series of action-based networking events, plenary sessions, panel discussions and workshops. – BuaNews
