February 22, 2011 / 5:50 PM / 9 years ago

Jo'burg road toll a test of ANC economic management

JOHANNESBURG (Reuters) - It takes a lot to get communists, unions and businessmen fighting from the same corner, especially in South Africa, but a new system of toll payments for motorways round Johannesburg has done just that.

The anti-toll coalition that cuts across habitual racial and income divides has also put the ruling African National Congress (ANC) on the spot, and could be a test of its willingness to press ahead with unpopular reforms.

With ANC politicians jostling for position ahead of local elections in May, the omens are not good.

In a speech this week Nomvula Mokonyane, premier of Gauteng, the province that includes Johannesburg and Pretoria and accounts for a third of national output, said the local economy could not support tolls of 0.66 rand (9 U.S. cents), per km.

Business Unity South Africa says the tolls will damage the competitiveness of Africa’s biggest economy and could push unemployment even higher than the current 25 percent.

The Communist Party and the COSATU union federation — ANC partners in government — have also voiced strong opposition.

Transport Minister Sibusiso Ndebele caved in on Tuesday and suspended the levy, intended to pay for a huge upgrade of the Gauteng road network. “Government reiterates its commitment to fully honouring the terms of the loan agreement for this transaction,” he was reported as saying by SAPA news agency.

The national roads agency, SANRAL, is adamant that there is no room to cut the tolls, intended to pay for the bulk of the 16.9 billion rand road improvement scheme.

LOAN MUST BE REPAID

SANRAL has paid for the upgrade by borrowing from the capital markets, rather than through central government finance.

The agency says a toll of 0.8 rand/km would enable it to pay off the 12 billion rand it owes by 2024, while the published rate of 0.66 rand/km would delay the pay-off date to 2028.

If the toll was cut to 0.4 rand/km, the revenue would not even service the interest on the loan and the debt would swell to 60 billion rand by 2024, SANRAL says.

This would require a government bailout, or a default, and would raise serious questions about the ANC’s ability to manage Africa’s most sophisticated economy and pay its debts on time.

“They’re up against a united front of opposition... “ said political analyst Nic Borain. “...it’s the same test they face on labour market regulation and a whole load of other things.”

Especially problematic for the ANC, the former liberation movement, is that the poor black majority will be hardest hit because under apartheid they were forced to live in townships far from the centres of Johannesburg and Pretoria.

Social geography has changed little in the 17 years since white-minority rule ended, and even though the ANC has poured money into improving links between places like Soweto and the main business districts, public transport options are limited.

“The public transport network in the province remains patchy and disconnected,” the Mail and Guardian newspaper said in an editorial last week that supported “user pays” taxes but demanded alternatives for the many poor.

“Road pricing is the right policy for South Africa’s dysfunctional cities, but it needs vast transport planning and joined-up government,” the paper said.

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