Transport subsidies up for discussion - Nzimande

The time has come to take stock of the entire transport subsidy regime – looking at every cent spent by government to subsidise all forms of transport in South Africa, said Transport Minister Blade Nzimande. 

Nzimande spoke to Fin24 on the sidelines of the International Transport Forum Annual Summit in Leipzig, an international gathering of politicians, CEOs, leading researchers and heads of international organisations. 

The minister said he met with MECs and they have agreed to prioritise the discussion on transport subsidies. 

The Gauteng Freeway Improvement Project (GFIP), e-tolls and the possibility of subsidising busses will be on the agenda. As well as the question of a simple subsidy to the taxi industry which transports between 65% and 68% of South African passengers, every single day. 

“We want to look into all of that so we can be able to say when we look at this amount, is it fair, is it equitable is it driving redress, or is it simply re-enforcing the old apartheid transport patterns,” Nzimande said. 

“We tend to forget for instance that government has paid billions of rands in subsidising the Gautrain. Gautrain, if truth be told goes to elite areas, and it is only catering for the middle class.” 

When asked about a time frame for this discussion, Nzimande said it would happen before the end of June. 

Funding road infrastructure 

As for the public backlash on e-tolls, Nzimande explained that the main issue behind it is how to find road infrastructure. 

“That’s the question. Is it user pay principle, or use per pay? If it is – who pays and who doesn’t pay? Do you have a fuel levy for everyone? Including people from Pietermaritzburg paying for Gauteng highways? Or do you have a Gauteng-only fuel levy to address this? Must it go back to Treasury to pay for this? 

“Our principle is that user pay principle is well established for those who can afford it. People must pay,” he said. 

Nzimande pointed out that if road infrastructure is not funded through e-tolls, then it leaves a gap to provide good road infrastructure.  

“We really do need to improve our road infrastructure. We need more roads for that matter. Highways in order to be able to support economic growth and development in our country.”  

Nzimande added that roads have been improved, but much more improvement is needed, especially of rural roads. “We mustn’t only be thinking about highways and main roads, we do need to build more rural roads because then you are supporting local economic development.  

‘Build roads and create wealth’

“We need to build roads to promote tourism, for economic development. The Chinese have a wonderful saying, ‘build roads and create wealth’. If you build roads, you create wealth because those roads tend to be used for economic development.”

Nzimande acknowledged that the GFIP must be addressed, as Sanral’s integrity is a growing concern.  

“You see people have now only spoken about Sanral in relation to GFIP, to e-tolls.  Sanral is doing some great work as an agency,” said Nzimande.  

He commented that presidents in the Southern African Development Community had asked President Cyril Ramaphosa for help to develop highways in the region as good as South Africa’s. 

Nzimande said he was instructed by the president to find a feasible way to use transport as a “key driver” of regional economic development.

“Sanral has got a lot of experience you know in terms of that but unfortunately now it’s image is associated with e-tolls when in fact they are continuing to build road and they are still going to be investing billions of rands. 

“We give them money. They are number two from Prasa. The highest entity that we give money to is Prasa, followed by Sanral.”

Sanral has the ability to raise funds through bonds and loans as a means to support road infrastructure development.

WATCH: Prasa has been like an ATM

* Fin24 is a guest of the ITF at its summit.

* SUBSCRIBE FOR FREE UPDATE: Get Fin24's top morning business news and opinions in your inbox. 

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