A case FOR eTolls

For the past year or so we have witnessed legal fights and social actions taking place between the government who are implementing the eTolls and various groups and representatives who are claiming the right to be the official representatives of the people who do not want the tolls. I argue FOR eTolls on the basis that, efficiently and transparently managed, they are the best solution for payment of the highway systems.

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To put this into perspective, these eTolls are toll-based payments, conducting electronically using a simply transponder tag attached to the windscreen of your vehicle, which causes a payment record to be added to your eToll account when you pass through a gantry. This is managed by SANRAL, the South African National Roads Agency Ltd, which is a wholly-owned agency of the Department of Transport of the South African government. The eTolls have been implemented on the Gauteng highways, particularly the GFIP project, (Gauteng Freeway Improvement Project) which comprises an initial 185km of upgrades, and which will eventually lead up to 560km of improved, upgrades and new highways.

Traveling in Johannesburg has always been difficult, it being measured as the 12th most congested city in the world, and the worst on the African continent.  of the world’s worst cities for driving, and this is coupled with the lack of good and efficient public transport, and that more and more people are preferring to drive to work.

The freeway development for Johannesburg was stalled for many years, and as the traffic volumes increased in the 1980s and 1990s we were required to use 2-lane highways which were more like parking lots during much of the day, and drivers avoided the highways as much as possible. The new developments, commenced in about 2002 have reached conclusion in 2013 for the first phase and I, for one, am very happy to now be driving on top-quality, international standard of highways, which for much of day is a great pleasure to drive on, and the (relatively) small price I have to pay for the tolls is countered at a personal level by the extra time I make up by not sitting in traffic. Saving 30 minutes per day by a more efficient road system makes economic sense for everyone.

My concern is the nature of the public resistance to eTolls, and the passion that has accompanied this, and it being socially unacceptable to say that you agree with tolls. I am agreeing with eTolls not because the government says so, but because there is a well-structured argument that shows that this is preferable to any other means, so long as this implemented efficiently.

The first concern is the perception that the road system should be “free”, but nothing provided as part of the public services is free, this is paid for by a variety of taxes, licenses and tolls, which is moved into the public purse, and which is then distributed to the various public services, roads being one. I recall this being stated by COSATU in their arguments, that the roads should be free to everyone, but this ignores the basis on who actually pays, and these are political statements intended to rally the population into a frenzy like sheep, on the basis of partial information.

The roads are not free and must be paid for in some way, so let us examine the possibilities for this. Firstly, the eTolls, or other tolling systems, in which the users of the service pay for this, just as you will pay for water usage – what you use is what you pay. Secondly, the increase in the fuel level, in which everyone who purchases fuel will also have to pay for these freeways, even if they never use them. This is simpler to implement, since the money is already being collected, and can be distributed more easily, but is it fair, since we will then all pay more for fuel. Thirdly, there is the option to take this out of the national budget for transport, which is provided by all taxes into the fiscus, which we all pay for.

Given these three options for payment, I will now outline a scenario concerning a taxi with ten occupants driving on the highway.

For eTolls, they pay nothing, they are exempt. Neither the taxi owner, driver, or the passengers incur any direct or indirect costs.

For the Fuel Level approach, the owners and drivers of the taxi will pay their tolls when they purchase their fuel, as an indirect tax, and this is hidden. It will be likely that the taxi industry will then opt to increase their prices and the passengers will pay the price, and possibly far more than the direct impact.

For the Budget approach, everyone will pay, including the drivers, owners, and the passengers, since this is taken from the basket of taxes which find their way to the treasury, and this cannot be controlled and tracked. We will all pay in the next budget when the taxes are increased to cover this cost.

Based upon this my argument is that, all things being equal, the eTolls are the best way, but this does not finish the discussion, since it is well-known that collection of eTolls is expensive.

To manage eTolls, means catching and recording every single event of a vehicle driving through a gantry, and all of the associated data to ensure that this is done properly, which will involve transponder readers, CCTV images of the vehicles through the gantry (possibly 3 images), axle counters embedded into the road surface, number plate readers, etc…. for a transaction which only costs around two rands! Are we in a position in which this cost of collection is actually approaching two rand, so that only 50 cents is paying for the roads, while R1.50 makes it ways into the coffers of the (largely international) companies who collect this money.

I would suggest that the approach to addressing this is nothing to do with whether eTolls are good or bad, but to ensure that there is transparency to ensure that a maximum of 15% of the eTolls are used for administration, and that local companies should be used exclusively to manage and monitor this, to ensure that all money spent remains in the country. I know that this level of efficiency can be achieved, in spite of extensive initial capital development of the infrastructure (which has already been spent and is in place), and I know this because I have built such a toll system before, and have recognised that whereas this is a difficult problem it is a perfect case for exploiting economies of scale through innovative practices for collection and control.

My suggestion is to bring together the “IT Elders” to review this and to provide recommendations on how to implement a highly efficient system for collection.