MANY AARTO QUESTIONS YET TO BE ANSWERED

Posted on 24 January 2012 by admin

Press release issued 20-01-2012

MANY AARTO QUESTIONS YET TO BE ANSWERED

“The Southern African Vehicle Rental and Leasing Association (SAVRALA) representing 450,000 vehicles is astounded by the RTMC’s intention to implement AARTO nationally on Sunday, 1 April, given the extent of the outstanding issues. Without question, the current level of road carnage is unacceptable, but it would be naïve to think that AARTO, as last presented in early 2011, offers the solution to changing driver behaviour. SAVRALA has repeatedly indicated its full support for the successful implementation of AARTO and has shown its willingness to engage further in order to achieve the desired result: safer roads for all; and not for the purpose of providing an additional source of revenue for the metros and/or putting people out of jobs.

SAVRALA is a member of the Business Unity South Africa (BUSA) transport task team that attended several NEDLAC (National Economic Development & Labour Council) discussions on AARTO last year. Government, represented by the Department of Transport, seems to have effectively dismissed both the NEDLAC process and its participants by choosing not to present the results of the AARTO Pilot Study and various other critically important documents, in order for NEDLAC members to consider AARTO and make a positive contribution.

SAVRALA expects that the public will have an opportunity to comment on any revised AARTO regulation in advance of the national implementation. In the context of road and transport related matters, the continued lack of effective partnership between Government and society in likely to polarize further the current broad-based opposition to problematic legislation and un-implementable regulations. The 1 April launch would be a missed opportunity to exploit the synergies between stakeholders and we urge government to consider effectively engaging further.

Editorial contact: Paul Pauwen 083 250 0333 (www.savrala.co.za)

SAVRALA ENCOURAGED BY E-TOLLING DELAY

Posted on 13 January 2012 by admin

Release date: 13-01-12

SAVRALA ENCOURAGED BY E-TOLLING DELAY

Southern Africa Vehicle Rental and Leasing Associations (SAVRALA) is encouraged by today’s announcement by the new South African National Roads Agency Limited (SANRAL) Board to apply its mind to the serious concerns raised by the great range of both local and national stakeholders who have opposed the current GFIP eTolling implementation plan which is now delayed. SAVRALA would welcome any opportunity to present its concerns to the new Board and have a constructive discussion about the funding of the Gauteng Freeway Improvement Project (GFIP). SAVRALA looks forward to further updates on this development and in particular the applicable timelines.

At a special SAVRALA members meeting yesterday, it was agreed that the Association would continue to oppose the current GFIP eTolling implementation plan and, if necessary, take legal action. The members confirmed that they were not unwilling to pay for the GFIP (or other road) improvements but wanted a more cost efficient funding model which the national fuel levy presents.

Further SAVRALA believes that only a very small number of about 20,000 Gauteng public road users are included in the reported 213,000 etags registered with SANRAL to date. It believes that the very large majority of etags may be held by financial institutions and a few mid-sized corporates, however, SAVRALA awaits further detail from SANRAL in this regard. It is, however, obvious that the general public, despite the expensive SANRAL marketing campaign, have given a clear signal to SANRAL that it rejects its eToll plans.

SAVRALA also believes the current investments in etags, infrastructure, staff and vehicles need not go to waste. Should the new SANRAL Board recommend to the Minister of Transport that the national Fuel Levy be used for the immediate SANRAL funding requirements, the current GFIP Open Road Tolling (ORT) infrastructure and etags, for example, could be used to assist in several Gauteng pilot projects to help better manage the current traffic violation process and even the pre-payment of vehicle license discs. We should look to try and utilize the available technology in a more value adding and innovative manner.

SAVRALA hopes that the very contentious GFIP funding debate can be resolved quickly, without any legal action, so that the momentum and energy now mobilized by the broad range of interested parties on tolling can be refocused on tackling the unacceptable loss of life on our roads. We need to all work together to ensure that South Africa meets its Decade of Action for Road Safety 2011-2020 commitments and reduce the carnage on our roads.

Editorial contacts:

Paul Pauwen

Email: paul@savrala.co.za

Cell: 0832500333.

NO TO OPEN ROAD TOLLING – GAUTENG PAYS MORE THAN ITS FAIR SHARE (Synopsis)

Posted on 12 January 2012 by admin

Release date: 12-01-12

NO TO OPEN ROAD TOLLING – GAUTENG PAYS MORE THAN ITS FAIR SHARE

In this context, on 18 April 2011, the Minister of Transport Mr. Sbu Ndebele launched the S’hamba Sonke – ‘Moving Together’ Programme. R22bn was allocated to this programme in last year’s Medium Term Expenditure Framework (MTEF) cycle and was described as ‘the Department of Transport launching a new roads upgrade and maintenance initiative to fix and upgrade the entire secondary roads network of South Africa’.

The earlier call for ‘a collective engagement of thoughts, ideas and alternatives in construction and funding methodologies’ was followed, by an announcement less than a month later, ahead of the final stakeholder consultation meeting, that toll tariff recommendations would now be presented to both the Minister of Transport and Finance.

Unlike the S’hamba Sonke Programme, the GFIP program will follow the ‘user-pay principle (tolling) to repay the loans and will be used for future operation and maintenance of these roads’.

This highlights the inconsistency and almost subjective nature of the ‘user-pay’ principle which was undermined further by the exemption of certain minibus taxis and commuter buses by the Minister of Transport late last year.

Gauteng roads users were advised that they will now have to finance the costs for both the estimated R23bn construction costs for the Gauteng Freeway Improvement Project (GFIP) Phase 1a and a further R6bn (over five years) for the administration of the Open Road Tolling system (ORT).

Under the veil of Public Private Partnerships (PPP), the plans to implement a national ORT structure seems like another finance scheme to help Government source much needed funds despite the fact that road users already pay for vehicle license fees, drivers license fees, multiple fuel levies (incl the RAF and Transnet fuel pipeline) and carbon taxes, excluding the personal income tax contributions which go to the central fiscus, to fund the operation of Government which, many would argue, includes all roads.

The majority of the opposition to ORT, which includes a cross section of society including business (e.g.: Business Unity South Africa, Road Freight Association and Automobile Association) unions (more notably COSATU), civil society groups (e.g.: South African National Consumer Union), opposition politicians and indeed some within Government (e.g.: Deputy Minister for Transport, Jeremy Cronin), have called for the total suspension of the ORT project.

All acknowledge the need for significant road improvements, as one tool to deal with modern day city traffic congestion; however, the funding of such projects remains the key missing piece to the national transport puzzle.

The parties opposing ORT (excluding most of Government) are unanimous about the need to consider more seriously the national fuel levy as an exponentially more administratively efficient method of both collection and funding. SANRAL’s own research conducted by the Graduate School of Business in Cape Town concedes that ‘paying for roads through taxes or a dedicated fuel levy is simply cheaper than imposing tolls on a road even if this is through an ORT system. The cost of collection is far lower because it does not incur the cost of the toll collection system’. In terms of efficiency, as a benchmark, SARS’s cost of revenue collection is just over 1% unlike the proposed ORT collection process which is expected to be around 35%.

Accepting the fuel levy as a funding option some suggest that only Gauteng road users should pay an additional fuel levy to fund GFIP. It can be very strongly argued that Gauteng road users already contribute significantly more to the national funding of the operation of Government and by implication, all other provinces, than what it receives back to fund Gauteng’s own needs.

Using various reasonable assumptions, Gauteng contributes approximately R260bn (39%), via SARS, to the central fiscus at Government.

If one assumes that each region gets a proportionate benefit from the National Departments, then the next big consideration is the Provincial allocations. Including conditional grants of R14,5bn, Gauteng will receive a total of approximately R65bn (18%) during 2010/11 in stark contrast to the estimated R260,834bn, contributed by the province to SARS.

Consolidating all revenues, Gauteng Provincial Government is budgeting to spend only R6,2bn (9.2%) on Roads and Transport in 2011/12, a far cry from the R9,4 bn (18%) spent in 2008/09. A reduction of R3,2bn for roads and transport in three years despite the growing needs.

At the end of the day, the national interest is not served by revenue raised in a province being ring-fenced and kept within that province for their own hospitals, schools, transport (incl roads) etc. Rather National Projects like GFIP and other national projects under SANRAL could be and should be paid nationally via an additional cost allocation from the fuel levy by all road users.

In summary, Gauteng residents and road users already contribute both 44% of the total national fuel levy generated and significantly more, at an estimated R261bn (39%), to the central fiscus via SARS compared to the approximate R65bn it receives back from central Government. Gauteng pays more than its fair share.

Editorial contacts:

Paul Pauwen

Email: paul@savrala.co.za

Cell: 0832500333.

NO TO OPEN ROAD TOLLING — GAUTENG PAYS MORE THAN ITS FAIR SHARE

Posted on 12 January 2012 by admin

Release date: 12-01-12

NO TO OPEN ROAD TOLLING — GAUTENG PAYS MORE THAN ITS FAIR SHARE

The Medium–Term Budget Policy Statement in October 2011 expressed Governments clear intention to now focus on national infrastructural spend over the next three years by allocating just over R800bn. Areas highlighted include a key focus on the desperate need to tackle the aging rail network and plans to support both national and provincial road network upgrade programs. The details of the road network investments will help give clarity to the division of roles and responsibilities between central Government, Province and its citizens.

In this context, on 18 April 2011, the Minister of Transport Mr. Sbu Ndebele launched the S’hamba Sonke – ‘Moving Together’ Programme in Durban, KwaZulu-Natal. R22bn was allocated to this programme in last year’s Medium Term Expenditure Framework (MTEF) cycle and was described by the Minister in his 1 June 2011 Budget vote speech (in the National Assembly) as ‘the Department of Transport launching a new roads upgrade and maintenance initiative to fix and upgrade the entire secondary roads network of South Africa’.

The earlier call, in the same speech, for ‘a collective engagement of thoughts, ideas and alternatives in construction and funding methodologies’ was followed, by an announcement less than a month later, on 30 June 2011 by the Transport Director-General and Chairperson of the Gauteng Freeway Improvement Project (GFIP) Steering Committee, George Mahlalela, ahead of the final stakeholder consultation meeting, that toll tariff recommendations would now be presented to both the Minister of Transport and Finance.

Unlike the S’hamba Sonke Programme, the GFIP program, said DG Mahlalela, will follow the ‘user-pay principle (tolling) to repay the loans, as well as for future operation and maintenance of these roads’.

Under the veil of Public Private Partnerships (PPP), the plans to implement a national ORT structure seem like another finance scheme to help Government source much needed funds. The more cynical view is that it can be seen as additional extortion of road users who already pay for vehicle license fees, drivers license fees, multiple fuel levies (incl the RAF and Transnet fuel pipeline) and carbon taxes excluding the personal income tax contributions which go to the central fiscus, to fund the operation of Government which, many would argue includes all roads.

All acknowledge the need for significant road improvements, as one tool to deal with modern day city traffic congestion in the current absence of an integrated public transport infrastructure; however, the funding of such projects remains the key missing piece to the national transport puzzle.

The parties opposing ORT (excluding most of Government) are unanimous about the need to consider more seriously the national fuel levy as an exponentially more administratively efficient method of both collection and funding. SANRAL’s own research conducted by the Graduate School of Business in Cape Town concedes that ‘paying for roads through taxes or a dedicated fuel levy is simply cheaper than imposing tolls on a road even if this is through an ORT system. The cost of collection is far lower because it does not incur the cost of the toll collection system[1]’. In terms of efficiency, as a benchmark, SARS’s cost of revenue collection is just over 1%[2] unlike the proposed ORT collection process which is expected to be around 35%.

Accepting the fuel levy funding option, some suggest that only Gauteng road users should pay an additional fuel levy to fund GFIP. In the context of the fuel levy being an equitable way of raising funds for major national transport infrastructure projects, as such projects will have a national economic multiplier effect, it can be very strongly argued that Gauteng road users already contribute significantly more to the national funding of the operation of Government and by implication all other provinces than what it receives back to fund Gauteng’s own needs.

FUEL LEVY

The Fuel Levy for the 2010 tax year ending February 2011, amounted to R34,4bn of which typically Petrol accounts for almost 58%. At a regional volume analysis[3] of both petrol and diesel purchases, Gauteng is the single biggest proportionate consumer at 36.5% and 23.4% respectively and consequently contributed R15,3bn (44%) to the total figure.

Despite the many statements late last year, the Department of Transport has still not indicated when it will convene a Roads Fund Summit with stakeholders to discuss road funding options. This must take place before any ORT implementation takes place.

SARS PAYMENTS

Interestingly enough, Gauteng as the smallest province at 1.4% of the national land area, with the largest population at over 11 million, contributes over 35% to the national Gross Domestic Product (GDP) [4].

Using the 2009 statistics as a proxy, over 40% of taxpayers are registered in Gauteng and contribute in excess of 51%[5] towards the R228bn in Personal Income Tax collected in the 2010/11 tax year.[6]

Using various reasonable assumptions, Table 1 below highlights that Gauteng contributes approximately R260bn (39%), via SARS, to the central fiscus at Government.

Table 1: Tax revenue performance for 2010/11 by product[7]

Tax Revenue Collection	National contribution to SARSR millions	Gauteng contribution factor and source	Gauteng contribution to SARS R millions
Pers Income Tax	228,096	40% of national assessed tax payers are registered in Gauteng and contribute 51%	116,329
Company Income Tax	134,635	Gauteng contributes 35% to national GDP	47,122
Secondary Tax on Companies	17,178	Gauteng contributes 35% to national GDP	6,012
Other	32	Gauteng contributes 35% to national GDP	11,2
VAT	183,571	Gauteng contributes 35% to national GDP	64,250
Fuel levy	34,418	Gauteng contributes 44% of Fuel Levy receipts	15,3
Excise duties	22,968	Gauteng contributes 35% to national GDP	8,038
Custom duties	26,637	Gauteng contributes 35% to national GDP	9,323
Skills Development Levy	8,652	40% of national assessed tax payers are registered in Gauteng	3,461
Other taxes and duties	17,996	Gauteng contributes 35% to national GDP
Total	674,183		260,834

Once collected, using several factors and weights, the Division of Revenue Act determines the division of nationally raised revenue between the three spheres of government, namely National, Provincial and Local Government and in 2010/11 the allocations were revised to 48.3%, 43.5% and 8.2% respectively[8].

GAUTENG REVENUE

Gauteng Province itself plans to raise R3bn of its own revenue in the 2011/12 budget. Vehicle license fees alone are expected to contribute, R1,8bn (59%) in addition to the expected R0,6 bn (19%) from gambling and betting taxes.

Consolidating all revenues, Gauteng Provincial Government is budgeting to spend only R6,2bn (9.2%) on Roads and Transport in 2011/12[9], a far cry from the R9,4 bn (18%) spent in 2008/09. A reduction of R3,2bn for roads and transport in three years despite the growing needs.

In the smallest Province with the largest population and the greatest proportion at 39% (3,9m)[10] of nationally registered vehicles, the allocation of just over R6bn seems out of line. Indeed, a further revenue opportunity of multiple billions exists if some of the 132,416[11] unlicensed Gauteng registered vehicles could be renewed.

Editorial contacts:

Paul Pauwen

Email: paul@savrala.co.za

Cell: 0832500333.

[1] The Graduate School of Business, An Economic Analysis of the Gauteng Freeway Improvement Scheme: August 2010 (p36) http://www.nra.co.za/content/Gauteng_GFIP_final_economic_report.pdf

[2] South African Revenue Service (SARS) Annual Report 2010/11,Graph 2 (p18) http://www.info.gov.za/view/DownloadFileAction?id=152203

[3] South African Petroleum Industry Association (SAPIA), Annual Report 2009, Figure 5 and 6 (p 16) http://www.sapia.co.za/publications/annual-reports.html (note: this regional volume breakdown was discontinued in subsequent Annual Reports)

[4] Gauteng Estimates of Provincial Revenue and Expenditure: 2011/12 Budget Statement (p8): 3.4 Gauteng economic review and outlook. http://www.treasury.gov.za/documents/provincial%20budget/2011/Budget%20Statements/GT/GT%20-%20Budget%20Overview%20of%20Prov%20Expenditure.pdf

Concerns that PRE cannot manage GFIP exemptions

Posted on 7 December 2011 by admin

07 DECEMBER 2011 SAVRALA PRESS RELEASE

Tourism concerned that PRE does not have the systems to manage exemptions from GFIP

Encouraged by the positive statements made by the MEC for Roads and Transport in Gauteng, Ismail Vadi, at the recent Gauteng Public Transport Regulatory Entity (PRE) launch, the Tourism industry remains concerned about PRE’s capacity to serve both their customer’s needs and SANRAL in Q1 2012.

The Southern African Vehicle Rental and Leasing Association (SAVRALA) representing approximately 450,000 vehicles, the Southern Africa Tourism Services Association (SATSA), the Coach Owners Association South Africa (COASA) and the Federated Hospitality Association of Southern Africa (FEDHASA) were represented at the launch by the umbrella association Tourism Business Council South Africa (TBCSA). Several transport association spokespeople criticised the previous Gauteng Operating Licensing Board (GOLB) for long delays and arrogance when processing permit applications but the MEC assured guests that the new PRE board will seek partnerships with its stakeholders and operate with ‘efficiency; professionalism; integrity, and strict adherence to the regulatory regime’.

The concerns were raised in light of the fact that the TBCSA (Tourism Board Council of South Africa) have many members who operate transfer and chauffeur-drive services, which, like metered taxis, require both vehicle and driver permits. Although the TBCSA looks forward to a constructive and efficient engagement with the new entity, they remain concerned about how the PRE will cope with plans by the Department of Transport (DoT) to implement GFIP (Gauteng Freeway Improvement Project) open road tolling in February 2012.

Admitting that the current entity has an ‘outdated and obsolete IT system’ the MEC did not give any clarity on how the proposed toll exemption for commuter buses and mini-bus taxis will be managed by the PRE. This is important as the new entity will need to maintain, at least daily, the validity status of vehicle permits allocated to certain vehicle license plates for the SANRAL tolling system to ensure that expired or withdrawn permits do not continue to receive exemptions from the proposed GFIP toll fees. Failure to maintain a high level of integration is likely to see a real risk of increased cloned minibus taxi and commuter bus license plates if the exemption is to be applied only to a narrow group of permit holders.

It is also unclear at this stage how the toll exemption status of minibus taxis and commuter buses, with permits issued outside of Gauteng, travelling on GFIP, will be managed. Will these road users be exempt? These types of questions become real issues for inter-provincial minibus taxi and commuter bus operators and could likely require national integration with SANRAL by all PRE’s and remaining Operating Licensing Boards. Operators would, for example, need to understand whether their Mpumalanga issued permit will be cancelled due to non-payment of GFIP tolls.

The DoT, after changing all its ‘user pay’ model descriptions, is yet to issue any detailed directive in the Government Gazette to help the various metered taxis, transfer and chauffeur-drive services understand why they may not be exempted from tolls.

A further question mark remains around whether the growing number of scholar transport operators, who will require permits, will be exempt from GFIP tolls?

It seems ironic that one of the potential new priorities for the Gauteng PRE in early 2012 may well be to invest in systems and resources (at vast cost) to accommodate integration into the proposed SANRAL GFIP toll system, for the purposes of tracking and administering exemption from toll fees. PRE will therefore be investing in major IT infrastructure without earning any revenue for this obvious administrative minefield.

The TBCSA feels that this is once again an example of wasteful and thoughtless expenditure and a further reason why urgent discussions need to take place between the DoT and the broad transport industry regarding the use of the national fuel levy to fund GFIP and other infrastructure projects in a much more cost-effective and administratively streamlined manner. SANRAL has estimated GFIP administration costs to be over R5bn for the next five years. TBCSA feels that this estimate is very conservative and will be far exceeded when the cost of collection and enforcement as required by the Criminal Procedure Act (CPA) is considered. This excludes the additional costs that will have to be passed on to Gauteng consumers. The billions to be spent on administration should rather be used for the construction and maintenance of highways around the country.

By utilising the existing fuel levy and increasing this by an acceptable margin to fund additional road expansion and upkeep would avoid all the above mention infrastructure costs and could save the country billions of Rands in additional expenditure.

Editorial contacts:
Paul Pauwen
Email: paul@savrala.co.za
Cell: 0832500333.

Carefully read your e-tag T’s & C’s urges SAVRALA

Posted on 11 November 2011 by admin

As a national body representing almost 450 000 vehicles on South African roads, SAVRALA (The Southern African Vehicle Rental and Leasing Association), as well as the Southern Africa Tourism Services Association (SATSA), the Coach Owners Association South Africa (COASA) and the Federated Hospitality Association of Southern Africa (FEDHASA) who all fall under the umbrella association of the Tourism Business Council South Africa (TBCSA), remain concerned and are unconvinced about the billing procedures of ORT (Open Road Tolling) and its implications despite the recent launch of SANRAL’s etag campaign.

While SAVRALA has as yet been unsuccessful in scheduling follow-up meetings with SANRAL (South African National Road Agency Limited) this month to review their many outstanding issues, SAVRALA are encouraging both individuals and companies to carefully consider the following before registering for an e-tag:

1) The final schedule of toll tariff’s and discounts from both SANRAL and the Department of Transport have yet to be published in the Government Gazette despite various communications on the Cabinet’s tariff decisions.

2) Despite ongoing requests for clarity and more detail, it remains unknown how SANRAL intends to prosecute road users who do not pay toll fees. It seems impractical and would most likely overburden the already strained judicial system if each individual who did not pay their fees, were to be prosecuted.

3) Currently no documented processes or systems are in place to resolve incorrect toll transactions caused by false (cloned) vehicle license plates. This puts the responsibility and the added cost onto Individuals and companies to ensure they have the necessary resources available to reconcile their SANRAL toll bills against their own vehicle/fleet movements.

4) The current e-tag Terms and Conditions available on the SANRAL website could be considered onerous and clearly place the responsibility of ensuring accounts have sufficient funds available on the registered e-tag user, as clause 22 requires a registered e-tag user to pay all fees and charges, irrespective of any dispute they may have over charges. This means the clause must be interpreted in the context of the risk of illegally cloned license plates as GFIP (Gauteng Freeway Improvement Plan) road users (as per clause 5) will be liable for all toll transactions recorded according to the user’s VLN (Motor Vehicle License Plate Number) or its e-tag.

5) No details have been made available yet to explain the criteria for exemption of commuter buses and mini-bus taxis. Depending on the definition of the criteria, many tourism related transport services may also be exempt. To date no explanation exists on how SANRAL will accurately maintain and enforce the validity of the various permits and routes etc.

The decision by SANRAL (who take their instructions from the Department of Transport) to launch their e-tag campaign now, whilst several further consultative processes are underway and which are largely led by the Department, only serves to cause further confusion amongst the general public.

SAVRALA looks forward to actively participating in the (yet to be confirmed) Road Funding Summit and will continue to propose that the burden of funding both the GFIP and other national road infrastructural priorities should come from an additional amount added to the national fuel levy as this is the most cost efficient and effective method to raise the required funds.

The need to build a viable and safe public transport infrastructure, as a real alternative to travelling on the roads, must also be considered. The Road Funding Summit should seriously consider how best to use the infrastructure already purchased, if other funding models like the fuel levy are to be implemented.

Editorial contacts:
Paul Pauwen
Email: paul@savrala.co.za
Cell: 0832500333.

SAVRALA continues to say ‘No’ to GFIP tolling

Posted on 27 October 2011 by admin

Release date: 27-10-11

At the Southern African Rental and Leasing Association’s (SAVRALA) AGM held today in Johannesburg, its members, representing over 450,000 vehicles, agreed not to register their vehicles for e-tags until their tolling concerns have been addressed. The lack of clarity regarding the enforcement of tolling, the burden of additional administrative costs on Gauteng road users and the risk posed to road users by cloned registration plates are only some of the outstanding concerns which present yet undetermined consequences to both its members and all Gauteng road users.

SAVRALA welcomes the recent instruction by the Minister of Transport to ‘halt all processes related to the tolling of national roads’. The Minister’s view that the ‘consultative processes should be allowed to take place to offer concerned parties an opportunity to share their views on the toll road program’ is warmly supported and long overdue. The intent, however, to implement tolling in Gauteng, should also be halted.

In addition, the firm statement given this week by the Finance Minister Pravin Gordhan to his Government to ‘use the resources we have far more effectively’, strongly resonates with SAVRALA’s concerns about the planned implementation of urban tolling in Gauteng. The expected administrative costs, conservatively running into billions, could be replaced almost overnight by an additional fuel levy without any wasteful administrative costs. Funds raised by the fuel levy could be allocated to key national infrastructural projects, such as the Gauteng Freeway Improvement Project (GFIP).

SAVRALA remains ready at all times to engage with SANRAL and the Department of Transport to address the current road infrastructure funding challenges. The lack of an effective consultation structure between the various transport related stakeholders and Government remains an important opportunity to be fulfilled.

Given the dynamic and fluid nature of the current tolling national debate, SAVRALA’s members will again review their position on the implementation of planned urban tolling in Gauteng within the next month.

Editorial contacts:
Paul Pauwen
Email: paul@savrala.co.za
Cell: 0832500333.

Government clearly depsperate to implement at any cost

Posted on 11 August 2011 by admin

SAVRALA has often applauded the Gauteng Freeway Improvement Project (GFIP) upgrades and is not unwilling to pay its respective share, but is yet to be convinced that the current urban toll model is the most efficient and cost effective.

An independent transport regulator should have been in place at the beginning of this process to ensure that there is reasonable oversight and due administrative process. In its absence, the fact that, in Gauteng we will be expected to pay R6,2bn to collect approximately R20bn, a collection cost of 30% over five years without any real transparency of the real costs involved is reason alone for grave concern.

Today’s announcement also does little to convince Gauteng road users that Government has displayed a genuine willingness to engage constructively and transparently with key stakeholders and the public at large. During the ORT Steering Committee process, established earlier this year to address the concerns of various broad based stakeholders, the Department of Transport held a press conference an hour before the final consultation meeting took place to announce their recommendations. One wonders what the point of the consultation was. Last month we also noted the formal request, by Business Unity South Africa directly to the Minister of Transport and the SANRAL CEO, for access to key information, which to date remains outstanding.

The GFIP tolling debate created the perfect opportunity to discuss, as broad based social partners, various funding options to tackle the road infrastructure backlog in the context of developing a reliable, safe and cost effective public transport system. The Governments desperate bid to steamroll the GFIP urban toll process has demonstrated an ability to decree a ‘user-pay’ methodology for all one day but, conveniently, when faced with threats of non-compliance from the taxi industry, decides to exempt ‘qualifying commuter taxis and buses’. Today’s announcement is notably thin on the rationale for the exclusion which in effect implies that potential toll users must, in addition to normal taxes and levies, now also subsidise public transport.

While Government may view today’s announcement as a further step towards the planned ORT implementation, we remain hopeful that there still remains opportunity for broad based stakeholders to engage with Government to identify a more holistic road maintenance strategy with a fresh but robust discussion on the use of the fuel levy funding mechanism leading to a better funding model with national support from all concerned and affected.

ENDS

PRESS RELEASE ISSUED ON BEHALF OF SAVRALA BY ADZOO. CONTACT LILI REES ON lili@adzoo.co.za or 011 462 0976.

e-toll engagement process an exercise in smoke and mirrors

Posted on 1 July 2011 by admin

01 JULY 2011 – SAVRALA PRESS RELEASE

According to SAVRALA, the Gauteng Freeway Improvement Project e-toll engagement process was an exercise in smoke and mirrors

The motoring industry and in particular the Southern African Vehicle Rental and Leasing Association (SAVRALA) and its members have been waiting with bated breath for yesterday’s engagement meeting with the Director General of Transport. Sadly, the announcement by Mr George Mahlalela on 30^th June of the recommended reduced toll fees and other measures was hugely disappointing.

Linda Kotze, President of SAVRALA, said that none of the real issues were addressed and that some of the more detailed and crucial concerns about both the administrative cost of the tolling system (estimated at R6,2billion over 5 years) and the real risk posed to the proposed income model through the lack of compliance by road users of the Gauteng Freeway Improvement Project (GFIP) remain unanswered. Kotze went on to say that neither the draft Steering Committee report published last week, nor the toll project reviews conducted by two leading accounting firms addressed the funding model risks presented if drivers did not actually pay their toll fees.

Kotze further commented that SAVRALA’s questions around the impact of an estimated traffic fine collection rate of 20%, as a proxy for e-toll compliance, may have a significant impact on the income model. These concerns remain unanswered and are of grave concern should the tolling model be implemented.

The announcement by the Director General of an independent regulator to oversee, for example, tolling fares and the setting up of a formal structure for stakeholders to more directly and regularly engage with the Department of Transport, is welcome and a positive development.

SAVRALA has always welcomed the much overdue GFIP improvements and is willing to pay for these but remains unmoved by the arguments given to date by the ORT Steering Committee and National Treasury – which disregard the merits of the fuel levy as a collection method for road improvements.

The ORT Steering Committee Draft Report (page 26) makes reference to and discounts ring fencing, on the basis that it is not National Treasury policy and ‘brings about inefficiencies in government spending over time as the lack of transparency means that agencies lose the accountability of the budget process for how effectively they apply the funds’. As far as SAVRALA is concerned, these reasons would appear to be selective in application as the National Treasury already annually funds various Provincial, National and Local authorities with billions of Rands for road upgrades and maintenance. SAVRALA feels that the road users and SAVRALA members are entitled to an adequate and transparent explanation of why ring fencing works for the RAF (Road Accident Fund) and, more recently, the fuel pipeline.

In addition, the ‘user-pay’ methodology is being selectively applied to the high volume commuter routes as an ‘urban toll’ in Gauteng and not as a consistent methodology across all road infrastructure projects.

In their draft report, the ORT Steering Committee has also ‘recognised the need for a holistic approach to the GFIP and therefore the public transport transformation work stream will continue as a longer term work stream to assist in the identified interventions’. SAVRALA openly welcomes the focus on an integrated public transport plan, but would like these solutions in place thereby offering commuters a truly safe and reliable alternative to their private vehicles before urban tolling is again considered.

SAVRALA remains concerned that many of the tolling implementation risks and concerns have not been adequately addressed by the ORT Steering Committee. SAVRALA remains committed to working with the Department of Transport and any stakeholder or road user to ensure that an efficient, effective and fair road funding methodology is developed.

ENDS

PRESS RELEASE ISSUED ON BEHALF OF SAVRALA BY ADZOO. CONTACT LILI REES ON lili@adzoo.co.za or 011 462 0976.

SAVRALA presents fuel levy as part of ORT funding

Posted on 29 March 2011 by admin

On Thursday 24th March 2011, the ORT Steering Committee started public consultations in Midrand. During its presentation, the Southern African Vehicle Rental and Leasing Association (SAVRALA) highlighted the significant ORT admin costs required in contrast to those of the fuel levy. Although it welcomes the new road and interchange upgrades; as the representative body of over 450,000 vehicles SAVRALA is “very concerned about ORT’s direct and secondary admin costs” associated with the management of tags, moving vehicles between locations and the necessary back office systems needed to support billing and customer queries.

Highlighting that the ETC tender of R6.2bn included R4.7bn for operational costs over eight years, SAVRALA’s view is that these could largely be saved by using the Fuel Levy mechanism. The current ORT eTag model also places significant administration costs on businesses which will have to be passed on to customers. SAVRALA estimates that an average car rental customer may have to pay an extra R32 per day in tolls, representing 10% of the average car rental daily rate. Leasing customers could also expect an increase of up to 33% in their cents per kilometer costs.

In proposing other revenue opportunities to help fund capital infrastructural projects which have a national multiplier impact like the GFIP, the economic loss due to accidents at over 3% of GDP has to be reversed and SAVRALA has called for “urgent real road safety enforcement by all stakeholders.” While the estimated 300,000 unregistered vehicles also presented an opportunity for increased license fees, SAVRALA proposed the “re-introduction of compulsory third party insurance” as one of several tools to try and change driver behaviour.

Just like many of the other business associations presenting to the ORT Steering Committee – more notably BUSA, AA, RFA and RMI – SAVRALA is concerned at both the lack of transparency surrounding the SANRAL ORT funding model and the absence of an appropriate platform for transport-related associations to engage effectively with the Department of Transport. In contrast to the developments at SARS, AARTO was quoted as an example of legislation that, from an administrative perspective, is not designed adequately to accommodate some basic technological opportunities which would reduce the current manual process. A closer working relationship would help make future transport related legislation more practical.

SAVRALA, while continuing to engage with SANRAL, have declared a dispute regarding payment terms. SANRAL have demanded that settlement for toll transactions for Key Account Holders be within seven days, failing which interest will be levied on outstanding balances. SAVRALA has received a mandate from their members calling for the generally-accepted business terms of 30 days.

Commenting on the presentation proceedings and the progressive alliance developing between the various transport associations, SAVRALA President Linda Kotze said: “This is hopefully the first step of many in a meaningful and transparent engagement process with both the Department of Transport and SANRAL. The ORT concern has actually had the effect of pulling us all together and it was very impressive to note that at our preparatory meeting earlier in the month, over 4 million vehicles in greater Gauteng were represented. We will now be heard.”

PRESS RELEASE ISSUED ON BEHALF OF SAVRALA BY ADZOO. CONTACT LILI REES ON lili@adzoo.co.za