Publications
Partners
PRETORIA - The proposed Gauteng Freeway Improvement Project would result in "unmitigated" success and tangible benefits for South Africa, a public finance economist has said, although the Democratic Alliance has challenged his findings.
Roelof Botha, director of a San Francisco-based venture capital company, former CFO of PayPal and grandson of former National Party foreign minister Pik Botha, said: "It will make the rich poorer, not the poor poorer."
This statement was perhaps in response to the Congress of SA Trade Unions that had recently said the project would make the poor poorer.
Botha's research, however, found that the project would result in the highest-income earning 20% of the richest people in Gauteng paying as much as 94% of the toll fees while most of the poor people would stick to public transport.
DA CHALLENGES BOTHA
Botha, who spoke in his personal capacity, argued that the flagship toll project would maintain South Africa's international credit ratings and obviate the need for fuel levy increases. It would also allow rapid investment in road construction, alleviate traffic congestion, and enhance safety.
The DA's Neil Campbell, however, has blasted Botha's findings and reaffirmed the party's opposition to the toll roads in Gauteng.
Campbell said: "[The] claim that most poor people will not have to pay tolls as they use public transport is not accurate as not all taxis and buses will travel toll free, but rather only those with licences and on approved routes."
He contended that home owners would also pay increased rates to fund the additional municipal road maintenance required due to increased pressure on roads by drivers avoiding the toll roads.
TOLLS ON HOLD
In 2011 the SA National Roads Agency announced that tolling was imminent on 185km of the N1, N3, N12 and R21 around Johannesburg and Pretoria. In terms of the GFIP, these roads and their interchanges had been improved and costs estimated at around R20-billion would be recouped through toll charges.
E-tolling was placed on hold in January, 2012, after a huge outcry that the fees were unaffordable. Botha contended that commuting time saved (due to additional lanes) would translate into productive earnings.
Campbell countered that the cost of every item transported along the toll roads would increase because hauliers would resort to raising their prices for transporting goods.
"This will impact on every resident in Gauteng, as the price of every item transported, including food, will rise," Campbell said.
Botha was also confident that the project would raise South Africa's international competitiveness. "The GFIP funding model, approved by the government as early as 2007, has helped the Treasury in its attempts to maintain sound credit ratings during a difficult period (due to the 2008/2009 recession).
"It has also helped Sanral to get an international investor rating from Moody's."
Botha added that alternative funding through a heavier fuel price levy would, in practice, translate into funding from the country's general revenue pool and increase the price of petrol by more than R1/litre - which would have an inflationary effect on the economy.
Roelof Botha, director of a San Francisco-based venture capital company, former CFO of PayPal and grandson of former National Party foreign minister Pik Botha, said: "It will make the rich poorer, not the poor poorer."
This statement was perhaps in response to the Congress of SA Trade Unions that had recently said the project would make the poor poorer.
Botha's research, however, found that the project would result in the highest-income earning 20% of the richest people in Gauteng paying as much as 94% of the toll fees while most of the poor people would stick to public transport.
DA CHALLENGES BOTHA
Botha, who spoke in his personal capacity, argued that the flagship toll project would maintain South Africa's international credit ratings and obviate the need for fuel levy increases. It would also allow rapid investment in road construction, alleviate traffic congestion, and enhance safety.
The DA's Neil Campbell, however, has blasted Botha's findings and reaffirmed the party's opposition to the toll roads in Gauteng.
Campbell said: "[The] claim that most poor people will not have to pay tolls as they use public transport is not accurate as not all taxis and buses will travel toll free, but rather only those with licences and on approved routes."
He contended that home owners would also pay increased rates to fund the additional municipal road maintenance required due to increased pressure on roads by drivers avoiding the toll roads.
TOLLS ON HOLD
In 2011 the SA National Roads Agency announced that tolling was imminent on 185km of the N1, N3, N12 and R21 around Johannesburg and Pretoria. In terms of the GFIP, these roads and their interchanges had been improved and costs estimated at around R20-billion would be recouped through toll charges.
E-tolling was placed on hold in January, 2012, after a huge outcry that the fees were unaffordable. Botha contended that commuting time saved (due to additional lanes) would translate into productive earnings.
Campbell countered that the cost of every item transported along the toll roads would increase because hauliers would resort to raising their prices for transporting goods.
"This will impact on every resident in Gauteng, as the price of every item transported, including food, will rise," Campbell said.
Botha was also confident that the project would raise South Africa's international competitiveness. "The GFIP funding model, approved by the government as early as 2007, has helped the Treasury in its attempts to maintain sound credit ratings during a difficult period (due to the 2008/2009 recession).
"It has also helped Sanral to get an international investor rating from Moody's."
Botha added that alternative funding through a heavier fuel price levy would, in practice, translate into funding from the country's general revenue pool and increase the price of petrol by more than R1/litre - which would have an inflationary effect on the economy.
