Has the bell tolled for toll-roads?

Mr. N Alli, Chief Executive Officer SANRAL asked “Why make somebody pay for something they don’t use [because they live in Brakpan or Cape Town]?” when he was arguing for the use of tolls to fund the GFIP rather than taxpayer funding [Business Report 22nd March 2011].

Yet it is common cause that infrastructure projects elevate land prices and SANRAL’s roads are no exception: land prices will rise in the commuter belts which use the upgrade. The extent of these windfalls is likely to equal the R20bn cost, according to research on property values close to new infrastructure such new tube stations on the Jubilee linein London.

The question to Mr Alli is therefore “Does SANRAL have a mandate to make some wealthy at the expense of others?”

To avoid this trap, the proper method for funding infrastructure is for the State to capture all land value increments to cover the capital and depreciation costs over the economic life of the road. No tolls are then necessary as the revenue is captured by Municipal valuation and rating offices. The toll collection costs will also fall away with all their bureaucratic muddling.

So let the bells toll not the roads.

10 January 2014 by Peter Meakin

Image courtesy of www.timeslive.co.za

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