PRESS RELEASE: DA quotes fuel levy study incorrectly
The Democratic Alliance's Ian Ollis has, once again, got it wrong on the funding of national roads.
Last week he said he would ask the Portfolio Committee on Transport to summon the South African National Roads Agency SOC Ltd (SANRAL) CEO Nazir Ali and the Minister of Transport Ben Martins to account for their failure to adequately investigate using the fuel levy to fund roads.
Ollis was speaking specifically about the decision by government to implement tolling as a funding model for the upgrade of highways in Gauteng and the Western Cape. In his statement Ollis cited two studies; one by the AA which was released in 2008 and a second by the Southern African Bitumen Association (Sabita).
With reference to the AA report Mr Ollis either did not understand or decided to stay quiet about the fact that the AA report only focussed on the national and provincial road network at the time, a length of 360,480 km or 48.25 % of actual total road network of South Africa.
Secondly, as indicated by Mr Ollis, the figure of R32 billion quoted by himself is only related to the ideal maintenance requirement, and excludes any additional amounts for addressing the existing maintenance backlog, which in the AA Report was estimated at R91,7 billion for the above network or the capacity upgrade/new road requirements of the network.
Based on detailed analysis of all available data in 2010 the maintenance budget required to sustain the South African road network of 746,000km was estimated at R65 billion, and the maintenance backlog at R149 billion, which if addressed over a 5-year period for paved and 10 years for gravel gives you an annual budget requirement of R81.7 billion (excluding capacity upgrades/new construction).
Adjusting the figures in the AA Report to reflect complete network, and for addressing backlog over a 5-year period result in an annual requirement of R84.6 billion (excluding capacity upgrades/new construction).
In national revenue statement, expenditure and borrowings as at 31 March 2013, the income from General Fuel Levy is stated as R40,5 billion by National Treasury, less than half of what is required just for maintenance.
Last week Sabita moved to distance themselves from Ollis' statement saying the DA has misunderstood the figures in the report.
In the statement Sabita CEO MS Solomons says: "We wish to state most emphatically that Sabita have never initiated nor published a report claiming that a fuel levy to fund roads was insufficient or otherwise."
Once again the DA has shown a complete lack of understanding about the complexities which surround the management and maintenance of a road network the size of South Africa's.
It is also interesting to note that the DA controlled Cape Metro received R 1.71 billion as part of the R9 billion fuel levying sharing with metros during 2012/13 from National Treasury, yet the Cape Metro only allocated R774 million or 45% of the received fuel levy to maintenance of their existing road network. This despite the DA's arguments of the direct link between existing fuel levy and road maintenance.
Instead they continue to use the issue of tolling as a political tool. "We have little doubt that once they have examined all the research done by SANRAL into the issue of tolling they will be convinced that it is one of the most equitable and sustainable forms of selectively funding targeted roads.
"If they make the effort to examine all the research done - not only by SANRAL, but also by reputable global institutions such as the University of Minnesota and the Reason Foundation - they will be left with little doubt as to the best way to fund the roads in question.
"SANRAL looks after the entire national road network, 84 percent of which is funded directly from the fiscus and 16 percent from toll fees. Tolling is selectively used and the impression that SANRAL is all about tolling or that all national roads are about to be tolled, is patently false.
"Also, the perception that we are against the fuel levy is misplaced. The fuel levy is an important revenue source for the fiscus. All we have warned against is that it is insufficient to look after the entire road infrastructure and that is borne out by studies such as the AA report and the DBSA's State of Infrastructure Report 2012," Mona concluded.
Issued by Meropa Communications
On behalf of The South African National Roads Agency SOC Limited (SANRAL)