Delay a toll on the poor

FAR from being a “huge victory for road users in Gauteng”, the Freedom Front Plus’s (FF+) intervention to attempt to halt the implementation of tolling on some Gauteng freeways will end up costing us all dearly — not least the poor.

Moody’s certainly had an opinion when it downgraded the South African National Roads Agency Ltd (Sanral) last week and put it on warning for another downgrade, citing a “significant deterioration” in the company’s cash flow.

President Jacob Zuma and the ruling African National Congress (ANC) are probably quietly cheering the FF+ on a rare event. The tolling of roads in Gauteng has united unusual bedfellows in protest: the Democratic Alliance and the communists; CEOs and shop stewards; taxi drivers and SUV owners.

And yet for the ANC government there is little room for manoeuvre. The money — R20bn in total — is spent. The roads are built, and the controversially expensive tolling infrastructure installed.

And Sanral’s debt is in urgent need of servicing.

The Transport Laws and Related Matters Amendment Bill has been on Mr Zuma’s desk since May. He obviously doesn’t want to sign it, given the mayhem this could unleash on the streets of Gauteng before next year’s election. Nonetheless, his decision to accept with alacrity the Freedom Front Plus’s objection to the constitutionality of the bill is the wrong decision for the people of Gauteng.

Sanral’s inability to raise the funds it needs to service its debt, and the resulting ratings agency downgrades, has an effect on investor confidence in public entities’ ability to manage their debt. And it makes it much more expensive for Sanral to raise further funds. Not that it is likely to go to the market now.

But more damaging is the fact that Sanral, which is run by one of the country’s most competent technocrats in Nazir Alli, is having to defer maintenance of its road network to avoid defaulting on its debt while the politicians fiddle.

The cost implications of this are alarming. The cost of returning a road to optimal condition rises at an exponential rate when maintenance slides. That extra cash will need to come from somewhere, be it at great cost from the market, from road users, or the fiscus.

With more than 80% of freight coming to Gauteng on one of Mr Alli’s roads, a deterioration in road quality will cause prices to rise as freight companies endure more time on the road and more damage to their trucks.

Tolling roads is the fairest way to pay for them, and we need to just get on with it. The FF+ has given the president an opportunity to do the wrong thing.