Discuss the possible welfare implications of e-tolling in Gauteng with respect to the administrative and monitoring costs of the system:

Standish (2010) says that one of the key constraints to economic growth of a country is their inadequate transport network. As per the European Commission (2014) is good quality infrastructure “a key ingredient for sustainable development”. A country’s economic growth is associated with the conditions of its roads (World Bank, 2014).

Poor infrastructure can hamper economic growth and a country’s ability to trade in the global economy (European Commission, 2014). According to Infrastructure Consortium of Africa (ICA), they found that there is about a 40% increase in costs of goods traded in African countries secondary to poor road, rail and harbour infrastructure. Poor road conditions reduce the mobility of labour and affects exporters to get their product to international markets, with resulting higher supply costs.

The current national roads authority in South Africa is known as SANRAL (South African National Roads Agency Limited). The minister of Transport represents the government which is a shareholder and owner of SANRAL. Their mandate is to fund, improve, supervise and sustain the national road network of South Africa. They introduced the concept of PPP (Public Private Partnership) and have two primary sources of income. As per SANRAL 2013 annual report, the National Treasury department financed non- toll roads while toll roads are financed by money borrowed from the capital markets or through concessioning of roads to the private sector consortium.

The Gauteng Freeway Improvement project (GFIP) is SANRAL’s largest highway upgrade project (SANRAL, 2014). The GFIP supplies, installs and operate the open road electronic toll collection system and its associated infrastructure. (SANRAL, 2014).

Welfare implication:

As per Standish (2010) is the road user’s benefit greater by driving on an upgraded toll road and paying a toll fee than on existing roads and not paying a toll fee. He feels that as toll roads are improved roads, there is lesser traffic congestion and faster travelling times, smaller change of road accidents as roads are in a better condition and also lower vehicle maintenance costs to users of toll roads.