Pay for trains you don’t use

GAUTRAIN: LICENCE FEES, AIRPORT TAXES AND EVEN VAT TARGETED FOR EXPANSION COST

Expensive and overpriced system we cannot afford to repay, says Outa.

Vehicle licence fees, airport taxes and even VAT are being targeted to further shore up the loss-making Gautrain and to get taxpayers to pay for its multibillion-rand expansion.

But Wayne Duvenage from the Organisation Undoing Tax Abuse (Outa) said yesterday: “Vehicle licences have already been pushed to the limit and increases to these taxes will have unintended negative consequences. Furthermore, an increase in VAT for the Gautrain would not be a wise idea.”

“Without transparency and clarity of costs and tenders, along with benchmarks to international best practice, we could very well find ourselves with an expensive and overpriced system that we cannot afford to repay.”

Duvenage said this was “precisely” what happened with the Gauteng Freeway Project and the e-toll tenders, which were excessive and made the scheme unaffordable.

This week, Gautrain Management Agency (GMA) CEO William Dachs said “people in cars don’t pay their fair share in terms of the taxes that they pay and the failure of the e-tolls system has perpetuated that problem”.

His admission that various funding mechanisms for the Gautrain were being considered, including “general tax increases to fuel taxes to fuel levies” flies directly in the face of the repeated justifications for the e-toll scheme, that it was based on the “user pays” principle, because in the case of Gautrain, nonusers would also be forced to pay through indirect taxation.

Dachs was commenting on the GMA’s engagement with National

Treasury about the sources of funding for the Gautrain expansion project – a further 150km of line and 19 stations – and the need to move people away from carbon-intensive modes of transport during a virtual discussion on the Future of Rapid Rail in Gauteng. Dachs confirmed licence fees were considered during the engagement with Treasury but stressed: “It’s not an infinite source. Gauteng

can’t become uncompetitive in terms of its vehicle licences compared to other provinces, but there is a strong case there.

“We also looked at developer charges, bearing in mind that people who develop around existing Gautrain stations have seen massive increases in the values of their properties,” he said.

Dachs did not comment on which of these sources was the most viable but said: “We would be looking at a blend of national government funding, provincial government funding, people who use the trains, private developers contribution as well as those who invest in the train itself.”

Dachs stressed there is a “massive misconception” that the people who use the Gautrain were massively subsidised in terms of the operations cost.

There was a “close to 100% recovery” of the operating costs of the Gautrain from the money people pay to use it although “Covid-19 messed that up”.

Dachs said this high operating cost recovery rate goes a long way towards the long-term financial sustainability of the Gautrain.

People in cars don’t pay their fair share