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Gautrain subsidy could fund entire GFIP - AA

Automobile Association says it is concerned that subsidy has reached R1.5 billion

South Africa's Automobile Association has reacted with concern to an announcement by Gauteng Transport MEC, Ismail Vadi, that the annual subsidy for the Gautrain has reached R1.5bn. Mr Vadi was reported to have made the announcement at a business breakfast on 24 June.

"R1.5bn a year would be enough to fund the entire annual payback costs for the Gauteng Freeway Improvement Project (GFIP) if one excluded the cost of the tolling infrastructure and the inflated costs arising from tender collusion on the project," the AA said. "The Gautrain subsidy is now consuming almost a quarter of the Gauteng Department of Transport's budget."

Approximately 60 000 people a day use the Gautrain which connects Pretoria with Johannesburg and provides a rail service to OR Tambo airport. "The Gautrainís fares make it clear that it is a transport mode for higher earners. It is unjust for taxpayers' money to be diverted from the transport budget to subsidise these commuters," the AA said. 

The Association explained that millions of commuter trips were made on Gauteng's freeways every day, and that those roads remained the arteries of the province for commerce. 

The cost of installing and managing the tolling infrastructure substantially increased the cost of the Gauteng Freeway Improvement Project, and government claims that tolling was chosen as a funding model because there was no money available elsewhere," the AA said.

"The scale of the Gautrain subsidy demonstrates that this is not true. The R1.5bn which is being used to subsidise a minority of Gautrain commuters would have been better used to fund the roads which benefit all citizens in Gauteng Province and the country."

The AA said that the government's selective reliance on the so-called 'user-pay' argument for roads was not sustainable. 

"The government's own review of State-Owned Entities, published in October 2013, found that there should be less reliance on user-pay funding for social infrastructure like roads," the Association said. "And if the user-pay principle is to be applied, it should be applied equally; we see no reason for the Gautrain to be exempt. We remain of the opinion that taxation is the most cost-effective way to fund transport infrastructure," the AA concluded.

Contact AASA Public Affairs
Telephone 011 799 1180
E-mail press@aasa.co.za

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