Abstract
M.Com. (Transport Economics)
This study deals with the problem of road user cost recovery in a
developing country. Two main problems areas have been identified.
The first deals with the shortage of funds for financing road
infrastructure. Secondly, the responsibility for financing road
infrastructure needs to be established.
The first objective of the study was to provide a theoretical
discussion on the subject of road user cost recovery. The second
objective was to establish how much the road users in the Republic
of Transkei currently pay for the use of road infrastructure.
Thirdly the study wished to establish how much the road 'users
should pay, and the final objective was to find methods for
u~ilizing existing and new sources for finance.
The empirical data for the study was obtained from licence
authorities, a border survey, state departments and municipalities
in the Republic of Transkei.
The literature study revealed that one of the most important
decisions to be made in transport policy is the required level of
expenditure on road infrastructure. The two techniques that are
generally used to determine this level are earmarking of a fixed
percentage of the total goverrunent budget for roads and the establishment of a dedicated road fund. The advantages and
disadvantages of a road fund are discussed.
The approaches that can be used to recover costs from road users
may be divided into three categories:
- Tax on vehicle usage that varies with the use of road
infrastructure.
- Methods aimed at vehicle usage which does not vary with the
use of road infrastructure.
- Methods that are not based on vehicle usage.
The Republic of Transkei applies three methods of road user cost
recovery, namely fuel tax, licence fees and levies on abnormal
loads. These three methods are a combination of all the basic
approaches that can be used to recover cost from road users.
The N2 national route is identified as the most important road in
the Republic of Transkei. The general condition of roads is poor
and not enough funds are spent on maintenance.
Costs allocated to road users are maintenance costs, capital costs,
and administration costs.
The existing method of cost recovery from road users is by means
of the road fund levy, by licence fees, customs and excise duty
and levies on abnormal loads. An evaluation of the existing recovery system in the Republic of
Transkei revealed that the system is unfair, total cost is not
recovered and there is no dedicated road funding program.
In conclusion it is suggested that the following four elements
should be added to the existing method of cost recovery from road
users levels:
- Increase the tax on fuel.
- Reviewing of the existing licence fees.
. - Implementation of a border toll system.
- Levying of a tax on tyres.
It is further recommended that a dedicated road fund is started
into which all road user levies are paid. The fund should be
administrated by either the Department of Works and Energy or the
Department of Transport. The fund should be subjected to all the
standard accounting and auditing principles.