Investor Presentaiton
E.1.1
Infrastructure
Roads & Transport: South Africa supports its road maintenance budget with a
"user-pays" system
A
South Africa
Context
Toll roads were first introduced in South Africa in 1984 as a form of road use
tax and have grown from an initial 27 km to -3.5k km
They constitute -16% of the National Road Network (-20 km). Toll fees
became necessary when the government couldn't afford road maintenance
from its fuel tax revenues
What did South Africa do?
SA made a comprehensive legal framework in the National Roads Act:
Ensured that tolls collected from users were spent only on maintenance
of toll roads
Removed the requirement of one alternative route per toll road in
1996 to incentivize PPPs by reducing toll avoidance by drivers
SA launched E-toll in Gauteng province as a means of electronic payment
Electronic tolling allowed for free-flowing traffic without stopping
Whilst the move was not received well by public, revenue from the
system funded freeway improvement projects in the province
SA partnered with 3 private companies to build toll on high value roads
A total of 3 PPPs between 1998 and 2000 were made for a term of 30
years
Sources: IBTTA, SABITA, Media coverage (Factiva), BCG Analysis
Key successes
Increased funding for road maintenance
Concessions fees increased from R3.98 Million in 2010 to R
5.84m in 2014
Road maintenance expenditure increased by R6m in the same
period
SA modernized its "user pays" system with the E-toll initiative
Learnings for Plateau State
Institute state laws/changes to state laws, allowing tolls and
concessions for private investors
Look for private sector partnerships to build tolls along high-value
roads
Legally guarantee that collected tolls would finance maintenance &
operations of the toll road to make users more receptive to paying
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