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Correcting a skewed system

02 December 2014

This month, we close off our series on the condition and funding of South Africa's roads. We've previously looked at the underlying issues which have increased traffic unnecessarily, like the move to road transport from rail, and we've looked at the shift towards tolling. We've also made the point that a single road in isolation doesn't drive economic development - it must be served by an entire network of feeder routes which must also be maintained. Our road network totals approximately 600 000km, and every road was originally built for some or other purpose which eventually resulted in someone earning money and paying tax. There is no road which lacks an economic benefit, but how well have those benefits been quantified?

Take Gauteng. Motorists have been courted with promises of increased economic activity from the tolled Gauteng freeways, but we must hasten to emphasise that the benefit doesn't come from tolling, which is merely a funding method. The benefit comes from the road itself, and almost all of the corridors through which Gauteng's freeways run were developed many years ago. Just look at the M1 through Midrand how much capacity for development remains along that corridor? Very little, in our view, certainly not enough to justify a hefty user charge.

As for funding new roads from tolls, should the aim of the roads not be to encourage economic activity (and increased tax revenues) rather than to be profitable in themselves? Consider, for instance, whether the proposed PWV5 freeway from Roodepoort to the R21 is still viable - the area through which it will run has been heavily developed since it was first gazetted. Far from encouraging economic activity, the PWV5 may decrease it by removing traffic from the businesses in those areas.

The PWV9 north-south corridor between Fourways and Pretoria West has better prospects, going as it does through a mostly-undeveloped zone, but what studies have been done on the viability of this area for development? Do the municipalities in the area have the funds to develop water, electricity and sewage infrastructure? And should pure economics be the only consideration? What about the rural character of the area? Have we, in fact, confirmed that the reasons behind the PWV9 are still as valid today as they were when the idea was first proposed, if indeed they were valid then? In an era where public transport is increasingly favoured over the private car, an important consideration is whether roadbuilding is still the answer to our transport questions. Perhaps roadbuilding should be third in line behind optimising existing road use by encouraging the development of urban bus systems, and avoiding roads altogether by building efficient urban rail networks.

Whatever the answers may be, they should arise from proper study, and the AA is concerned that the benefits claimed for roadbuilding are often vague or exaggerated. In our view, roads should be built or enlarged only once there is solid evidence that they will generate GDP growth, employment and tax revenue. Reducing congestion is no longer a convincing argument - that's what public transport should do.

Congestion is certainly a buzzword for users of the Gauteng freeways. During the freeway upgrades, almost no attention was paid to improving access to the freeways by upgrading the surrounding municipal and provincial roads. The freeways were regarded in isolation and the alleged benefits have not been proven with any scientific rigour. Suburban traffic jams remain commonplace and we find little evidence that freeway travel times are shorter. And is it acceptable that SANRAL should put an arbitrary financial value to something like free time in an attempt to justify tolling? Free time may be valuable in many senses, but we agree with the view that it cannot generate actual hard cash for the average salaried employee.

So what to do about this? At the outset, we need to cease viewing big roads as more beneficial and small roads as less beneficial. We need to begin to think in terms of the entire road network.

Next  we need to survey the network. This is not as difficult as it sounds. Google Street View's cars managed to document almost every single road in South Africa in quite a short time. Much progress has already been made via iRAP (the International Roads Assessment Programme), but while the focus of iRAP is on improving safety features of roads, South Africa has a more pressing problem: maintaining them in an adequate condition.

If we had a true picture of our roads, we could budget and prioritise. Roads in the poorest condition with the highest traffic volumes or crash rates should take precedence, with the rest of the road network being prioritised accordingly. We should not believe that this is a problem we can solve overnight either. The CSIR has been warning since 1995 that the rot runs deep on our roads, and a realistic time frame will need to be set. A decade is a fair timescale, in our view.

On the issue of roads funding, we need to set aside tolling as a de facto solution. Tolling should only be considered when a new route is built which offers a clear, scientifically-proven benefit over an existing route, and when proper and credible studies and consultation processes have been carried out which show public acceptance and financial viability. The state cannot afford conflict with its citizens as has occurred in Gauteng and the Western Cape over tolling projects.

Roads must be funded from tax which does not incur high collection costs or require additional measures to enforce compliance. If the money collected from the fuel levy were ring-fenced and dedicated to roads, the roads maintenance backlog could be tackled with vigour, and the resulting improvement in road safety would reduce the cost of crashes to the country, further improving the government's financial position. Government cannot continue to deny the viability of fuel levy ring-fencing if the Road Accident Fund can have a ring-fenced fuel levy, why not the roads themselves? But critically, the fuel levy must be set at a level aimed at recovering the costs of road upgrades and maintenance. It should be priced for the real world on the basis of a financial plan, rather than as an arbitrary figure. It is trite to claim that a roads tax on fuel would benefit one province more than another, as some have claimed, but every road in every  province will eventually need repairing or replacing. That makes the issue a national one and it needs a national solution. 

Using the 2008 AA Road Conditions and Funding Report as a basis, we estimate that an increase in the fuel levy by approximately R1.15 per litre could fund South Africa's entire new build requirement and maintenance backlog over ten years. There is no point in a higher fuel levy, since we would then be funding roads beyond our capacity to build and maintain them.

On the point of maintenance, there is little doubt that municipalities and provinces are struggling with roadbuilding capacity. There is also considerable duplication of functions from one municipality to the next, causing costs to creep up and efficiency to decline. 

This is where we believe SANRAL has a role to play. Although it is called a National Roads Agency, it is concerned only with national roads in their narrowest definition, rather than 'roads nationally'. If SANRAL were to take over maintenance of all roads, from municipal back streets to national freeways, economies of scale could be unlocked (such as bulk purchase of roadbuilding equipment and supplies), duplication of functions removed, engineering competence spread more widely and roads standards harmonised. If government departments such as Home Affairs and Social Welfare can have satellite branches wherever there is a need, why not our national roads agency too? Additional funding could be obtained by allocating the current municipal and provincial roads budgets to SANRAL.

For this to happen, the AA's stance is that SANRAL should be collapsed back into government as used to be the case, forcing it to adopt a more austere operational model. This would give us better roads cheaper, and provide engagement with citizens, rather than confrontation.

To sum up: a quality, standardised national roads network at a reasonable price is within our grasp. The money is there - if the government had put the fuel price reductions of the last two months into a dedicated roads levy, our roads funding problem would have been solved completely for the next decade and motorists would not have felt any difference to their pockets. The capacity is also there, for the most part. What we need is the will to make it happen, and that will require SANRAL and the national Treasury to take on board what the country's citizens are telling them about tolling, and also to give a hearing to the AA's long-standing warnings about road conditions as a whole. 

By changing tack from the country's narrow, tolling-driven national roads policy, the second- and third-tier roads which support economic growth would enjoy higher priority, road safety would improve and citizens would get more road for their Rand.

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