NEWS & ANALYSIS

Behind the Gauteng toll road decision - Sbu Ndebele

Transport minister forms steering committee to address public concerns

Statement by Minister of Transport Mr Sibusiso Ndebele, MP, at the media briefing on the formation of the Gauteng Toll Steering Committee, held at Parliament, Cape Town, March 8 2011

In her State of the Province Address on 21 February 2011, the Premier of Gauteng Ms Nomvula Mokonyane had the following to say regarding the Gauteng Freeway Improvement Project (GFIP). "We are not opposed to the idea of tolling as a cost recovery mechanism. However, we are concerned at the manner it is to be implemented, including the pricing and its impact on the economy of our province. In the light of these developments, we are looking forward to a meeting that has been agreed upon between the Minister of Transport and the Gauteng Provincial Government on the 22nd of February to explore alternative options in the best interests of commuters and the state."

Indeed, on 22 February 2011, I met the Premier together with the MEC for Transport Mr Ismail Vadi. They explained to me that consultation on the tariffs had not been adequate. These tariffs are meant to be operational by the end of June 2011.

We then announced the withdrawal of the gazette on the proposed tariffs, to allow for more thorough consultation. Both myself and the Premier of Gauteng assumed our positions as Premier and Minister of Transport in May 2009. Major commitments and agreements had long been concluded by that time. These were primarily the initiative of the province, but adopted by the national government.

The first of these initiatives was the Gautrain. The Gautrain consists of two lines. The first one, referred to as the tourist line, became operational before the 2010 World Cup. The second, referred to as the commuter line, goes from Johannesburg to Hatfield Station in Tshwane and will be operational by June of 2011.

It is meant to carry 40 000 commuters per hour in less than 38 minutes. It will have 125 feeder buses operating between Sandton, Fourways, Midrand, Centurion and Hatfield.

The Gautrain cost R25 billion, with R15 billion being paid by the national Department of Transport. We have transferred the last tranche of R8 billion from our side. The concessionaire will henceforth carry all the associated operational costs.

Background to the Gauteng Freeway Improvement Project (GFIP)

The second initiative was the Gauteng Freeway Improvement Project.

It was in November 1996 when the Province of Gauteng identified a toll roads network project for the province. This was followed in 1998 by the Gauteng Toll Road Strategy.

However, a province, unless it has special legislation to that effect, does not have the competence to declare and operate toll roads. This can only be done through national government and its agencies.

To this end, in 2005 a working group chaired by the Department of Transport consisting of the South African National Roads Agency Limited (Sanral), Gauteng province and the City of Johannesburg was formed and produced a report in June 2006.

This working group also prepared a Cabinet Memorandum which empowered Sanral to become the project manager and fund-raiser for this toll roads project.

I must emphasise that this was the first phase. On 2 February 2011, the plan for the second phase was presented to government which extends the project to other networks in Gauteng.

By 2006 the GFIP had already been adopted as a joint project of the Department of Transport, the Gauteng Department of Public Works, Roads and Transport as well as municipalities in Gauteng, namely Johannesburg, Tshwane and Ekurhuleni and Sanral.

In 2007, the Mayoral Committee of Johannesburg received a report on the Gauteng Freeway Improvement Project (GFIP). In 2007, the City of Johannesburg further produced its own report.

Discussions continued between 2006 and 2009 with and between the City of Johannesburg, Gauteng province and Sanral and included the future beyond Phase 1 (the current Phase) of the Gauteng Freeway Improvement Project (GFIP) to the subsequent phases.

In October 2007, Notifications on the intention to Toll were sent to the directly affected Districts and Municipalities. This included the Ekurhuleni Metro, City of Johannesburg, City of Tshwane, Metsweding Municipality and the Nokeng Tsa Taemane Municipality.

At the same time, Notification on intention to Toll was also sent to districts and municipalities not directly affected by the proposed tolling GFIP scheme.

These were the West Rand District Municipality, Westonaria Local Municipality, Mogale City Local Municipality, Midvaal Local Municipality, Emfuleni Local Municipality, Randfontein Local Municipality, Sedibeng Local Municipality, Leseding Municipality and Kungwini Municipality.

It was in February and July of 2008 that the R21 - between Tshwane and the OR Tambo International Airport - and parts of the network around Johannesburg were declared toll roads.

The issue facing Gauteng province together with the municipalities at the time was how to fund this ambitious programme.

It became clear given the fiscal constraints at the time that the only available option was to fund the programme through debt funding. For this reason Sanral was proposed as project manager because of its capacity to raise funds in international markets.

This is the reason why provincial roads such as the R21 - all roads with R are provincial roads, those with N, national roads - were transferred to Sanral. The transfer and proclamation as national roads had to take place because tolling is a competence of the national Department of Transport.

It is now my responsibility as the Minister of Transport to address all the current concerns relating to this issue. We will deal with all the attendant challenges in this regard together with the people of Gauteng.

As indicated above, following our meeting of 22 February, we made a commitment that a Steering Committee would be formed to address all the concerns surrounding e-tolling in Gauteng.

I must state that tolling remains one of the most viable means of funding transport infrastructure all over the world. Many countries - developing and developed - including China, the United Kingdom, the United States of America, use tolling to raise funds for the construction of much-needed transport infrastructure. There is no debate in our country about whether or not we require well-maintained roads, world-class airports or a modern rail sector; the debate is only about how these projects must be funded.

The deterioration of infrastructure and the non-existence of access roads has been a major issue for us since we assumed office. We have obtained a total of R22 billion, beginning this financial year to 2014, which will vigorously deal with provincial road maintenance, potholes and community access roads.

This is a programme with dedicated funding called S'hamba Sonke, and will create more than 70 000 jobs.

Part of this consultation process is to begin to debate fully the various funding options for road and other infrastructure in South Africa.

The Department of Transport has already started to focus on this question, with the allocation of R22 billion over three years for road maintenance and rural access.

As part of the S'hamba Sonke programme, we will by the end of this financial year have spent R6.4 billion on ramped up rural road maintenance and will create 70 000 jobs. This is one of the most significant allocations from the fiscus, which will address the pressing matter of potholes and increase rural access

Steering Committee

Today we announce the government-side of the Steering Committee, as a result of concerns surrounding the e-tolling in Gauteng. We decided on an intensive consultation process. We are consulting because we do not want to choke the economy and people of Gauteng. At the same time, we want to meet our commitments for the repayment of this R20 billion debt.

In this regard, we have formed a Steering Committee to address on a consultative basis the proposed tariff structure and to explore the possibilities of increasing the Public Transport offering to provide more options and ease the burden on the Gauteng commuter.

The Steering Committee is chaired by the Director-General of the Department of Transport, Mr George Mahlalela, who will after consultation with all stakeholders compile a report for consideration of the political principals by the end of April 2011.

On the financial side, the Steering Committee is charged with reviewing the financial assumptions underpinning the current proposed tariff structure. The Steering Committee will consider various funding options, including the financial implications of each and a recommendation on the most appropriate option.

Furthermore, the Steering Committee will look at short-term measures to improve public transport in Gauteng; improving the current public transport offering so as to provide commuters with viable travelling choices, and thus reduce their dependence on the private car.

Beyond the immediate, we seek to reach a point where we have:

  • Better integration and reliability of existing public transport services in Gauteng;
  • Improving the safety and security of public transport in Gauteng; and
  • Improving medium to long-term investments in public transport infrastructure, to improve coverage and accessibility of the network.

Chaired by the Director-General (DG) of Transport, the core of the Steering Committee is made up of representatives of the Gauteng Office of the Premier, the Gauteng Department of Roads and Transport and the (national) Department of Transport. These officials include:

  • Kgaugelo Lekgoro Office of the Premier;
  • Benny Monama, Head of Department Gauteng; and
  • Mr Nazir Alli, CEO of Sanral.

The Constitution of the Committee is expected to be completed by 20 March, and report by the end of April 2011. We plan to include as part of the Steering Committee organised business, organised labour, commuter organisations and other government structures and social formations.

An opportunity will be afforded to South African citizens to make written submissions, in enhancing the work of the Steering Committee.

All submissions will be considered by the Steering Committee when compiling its report and recommendations to the political principals.

Written submissions are invited from all stakeholders and can be forwarded for the attention of: The Director General, Department of Transport, 159 Struben Street, Pretoria, 0002.

As from Monday next week, a series of meetings will be arranged with each of the key stakeholders. We have established a project management team in the DG's office with the responsibility of managing the day-to-day operations of the Steering Committee.

We have given the Steering Committee a very tight deadline to submit its final report to the political principals, having consulted and considered all the submissions, by the end of April 2011.

We consider the work of this committee as a historic attempt at finding solutions to some of the vexing issues of our time through broad consultation with the users of our transport infrastructure, the taxpayers, business, labour, organised formations and inidviduals in our society.

We have no doubt that this committee will deliver.

Thank you.

Issued by: Department of Transport, March 8 2011

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