A summary from economist Mike Schussler on what he learnt from the Transport Forum sessions on road funding in South Africa.

1. My summary of what I learnt here at the Transport Forum.

2.  Firstly the economic non financial numbers.
 The value of SA roads
 What it costs
 Funding roads the options.
▪ Include some public transport.
 The mix.

3. 5,410665
11
0
2
4
6
8
10
12
14
16
18 1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
Millions
When current phase of GFIP was
completed SA had 8,8 million
vehicles end 2010
Now SA has 11,3 million
vehicles or about 29%
more
By 2022 SA will
have about 45%
more cars than in
2010

4. 16
24
-
5
10
15
20
25
Billions

5. -
500
1 000
1 500
2 000
2 500
3 000
3 500

6.  Vehicles more than doubled from 5,4 million to just over 11 million.
 Fuels sold (taxable road used volumes) increased by 50% from 16
million litre to near 24 million.
 Fuel used per vehicle decreased from about 3000 litre per year to 2
100 litre per year.
▪ The fuel is taxed and data is SARS derived. It excludes Parafin
and Jet Fuel and Marine diesel.
▪ However I believe there are some leaks in the tax system but not
more than say 4 to 5%.
 Road surface has not changed much. Not sure how much but very
little and some roads are no longer drivable.

7. -30,0%
-20,0%
-10,0%
0,0%
10,0%
20,0%
30,0%
40,0%
50,0%
Jan-09
Jun-09
Nov-09
Apr-10
Sep-10
Feb-11
Jul-11
Dec-11
May-12
Oct-12
Mar-13
Aug-13
Jan-14
Jun-14
Nov-14
Apr-15
Sep-15
Feb-16
Jul-16
Dec-16
May-17
Oct-17
Mar-18
Aug-18
Percentage change rail payload
Percentage change Rail payload
5 per. Mov. Avg. (Percentage change Rail payload)

8. -20,0%
-15,0%
-10,0%
-5,0%
0,0%
5,0%
10,0%
15,0%
20,0%
25,0%
Jan-09
Jun-09
Nov-09
Apr-10
Sep-10
Feb-11
Jul-11
Dec-11
May-12
Oct-12
Mar-13
Aug-13
Jan-14
Jun-14
Nov-14
Apr-15
Sep-15
Feb-16
Jul-16
Dec-16
May-17
Oct-17
Mar-18
Aug-18
Percentage change Road Freight for contract payload
Percentage change Road payload
5 per. Mov. Avg. (Percentage change Road payload)

9. 70,0%
72,0%
74,0%
76,0%
78,0%
80,0%
82,0% Mar-08
Aug-08
Jan-09
Jun-09
Nov-09
Apr-10
Sep-10
Feb-11
Jul-11
Dec-11
May-12
Oct-12
Mar-13
Aug-13
Jan-14
Jun-14
Nov-14
Apr-15
Sep-15
Feb-16
Jul-16
Dec-16
May-17
Oct-17
Mar-18
Aug-18

10. Fuel funding is not enough for roads.

11. 30%
35%
40%
45%
50%
55%
60%
65%
Jan-…
Jul-07
Jan-…
Jul-08
Jan-…
Jul-09
Jan-…
Jul-10
Jan-…
Jul-11
Jan-…
Jul-12
Jan-…
Jul-13
Jan-…
Jul-14
Jan-…
Jul-15
Jan-…
Jul-16
Jan-…
Jul-17
Jan-…
Jul-18
Jan-…
The share of the Petrol price which is made up from local SA charges
Includes taxes; Road Accident Fund; Retail & wholesale margins; Land
transport & storage.
Excludes actual fuel price; refinary margiins; port ; sea freight; insurance on
ocean
Local component % of retail petrol price
12 per. Mov. Avg. (Local component % of retail petrol price)

12. Not perfect I agree, but the number we have for 2013 is old and we need to
update mainly due to inflation the replacement value of roads.

13.  Road network was valued at R2 trillion replacement cost in 2013.
 This would be about R2,75 trillion by now.
 To replace the roads we have would mean we to do about R137.5 billion
per year in March 2019 money. (over 20 years)
 We would need to repay debts obtained of about R4 billion a year. (10
years)
 To grow the road network just 1% a year would mean about R27 billion
added.
 As road users normally help to fund public transport but that would add
R33 billion at least
 So total funding required from motorists if only motorists pay is well
over R190 billion a year.

14.  SA builds cheaper roads generally than Northern Hemisphere
Countries as they use more “water-proofing” i.e. Tar.
▪ However this means more maintenance of the road surface.
 Lifespan of roads are about 20 years. Sometimes good
maintenance can help make this longer and resurfacing can help
too.
 SA had a good road building industry which is now under pressure.

16. 2018/19 2019/20 2020/21 2021/2022
R million
Revised
estimate
Medium-term estimates
Economic regulation
and infrastructure
92 632 101 264 108 348 118 857
of which:
Water resource and
bulk infrastructure
24 066 27 051 29 698 33 617
Road
infrastructure
44 389 47 311 50 030 53 670
Public transport including commuter rail
got R33 but increases to R53,2 billion –
same as road then in 2021/22
Municipal infrastructure grant was R15,2
up to R16,8 billion

17.  There is a problem here in that local government are R13 billion
short on operational budget.
▪ This means they have to “steal” from capital budget.
▪ As electricity and water are income earners for local government
they will take the bulk and later all the money.
▪ There was a R23 billion capital shortfall as this is the capital
budget was reduced with in 2018.
▪ Roads will probably see less of the capital money here.
▪ The are parts of the fuel levy going to metros to fund roads etc.
 So much of local government will not go to road in future.

18. Costs and options.

19.  Include small part of public transport and fuel tax if only option for
user pays would be about R7.82 per litre.
▪ About R7,50 per litre for roads alone.
▪ R6.18 per litre for upkeep and replacement alone – no growth.
 If all public transport subsidised and say Taxis get tax off then fuel
tax for the rest of us could go close to R10 per litre.
 So fuel tax alone will be a very expensive option particularly for
trucks!
▪ And if trucks bear that then the cost to consumers also goes up.

20.  In 2017/18 R70,9 billion collected.
 This year about R80 billion will be collected via fuel levy. (at R3.37)
▪ (excluding RAF)
▪ This is not just for road however and many countries use it to
pay for public transport too.

21.  There is a problem here in that local government are R13 billion
short on operational budget.
▪ This means they have to “steal” from capital budget.
▪ As electricity and water are income earners for local government
they will take the bulk and later all the money.
▪ There was a R23 billion capital shortfall as this is the capital
budget was reduced with in 2018.
▪ Roads will probably see less of the capital money here.
▪ The are parts of the fuel levy going to metros to fund roads etc.

22.  Collect licence fees but this is in the single digits overall. R4,3
Billion in 2013 for example.
 So very little
 They can collect a fuel levy but not one has done so yet.
▪ WC did research into it.

23.  Tolls
 Congestion charges.
▪ Time of day charge or place charge
 Distance charge of about R1 per KM.
 Further charges on parking by municipalities

24. Whatever it will be will have to be a mixture and we will have look into it
soon. Implement as well.