DAVID GLEASON: An easy way to stop the e-toll wars
THE arguments about toll roads continue to occupy pride of place in the national debate, notwithstanding the abrupt departure of South African National Roads Agency (Sanral) CE Nazir Alli. The matter of how the improved Gauteng freeways are to be paid for remains unresolved, with the high court having ordered a full review of the process to permit calmer heads to prevail.
Meanwhile, independent macro-economics agency Econometrix has produced a novel method of resolving the issue. Its chief economist, Azar Jammine, has examined the petrol price, a commodity that has been subject to repeated hikes in successive months recently. The starting point is to consider the crude oil price and the factors that influence it. As Jammine puts it, an ironical benefit that is the product of fears of lower world growth is that the oil price has retreated by 5%-7% on expectations of lower demand.
In the absence of yet another round of quantitative easing by the US Federal Reserve, which "might fuel the fires of further speculation in oil", and absent talk of war between Iran and Israel, it's probably safe to presume that the oil price will move in a fairly narrow band (for the time being). Despite the devaluation of the rand, the local price of crude oil has fallen by about 5%.
And that translates into overrecoveries on petrol by 62c a litre and on diesel by 26c. And, adds Jammine, the average overrecovery in the first two days of this month was also significant at 27c/l. His sums show that, if the oil price and the rand "remain at their current levels for the rest of the month, it may be possible for the petrol price to be reduced by as much as 59c/l on June 7".
Now let's look at what the government would hope to pull in from the tolls. Econometrix reckons this would be between R2bn and R2,5bn a year. The fuel levy accounts for R1,97 of every R12 per litre of petrol. Adding just 9c-10c to the levy would bring in the required R2bn-R2,5bn needed to pay the annual interest bill on Sanral's Gauteng freeway loans (but would not provide for any capital redemption).
Taking that a step further, it would be possible to achieve precisely the required effect by reducing the petrol price by 50c/l next month instead of the calculated 59c. As Jammine puts it: "The mind boggles as to why the opportunity cannot be exploited for the government to raise the fuel levy by 9c/l . all it would mean is reducing the petrol price by 50c/l instead of 59c/l and it would avoid all the additional collection and enforcement costs implicit in the introduction of the tolling system."
In the meantime, the toll war has claimed its first victim with Alli's abrupt resignation from Sanral. A load of hot air has accompanied his departure as though he was the sole architect of the toll roads farrago. In fact, Alli was well qualified and enjoyed a reputation as an incorruptible civil servant. In this country, that tells you volumes.
But it is also true that he was arrogant to the point of being unpleasant. Not many of those with whom he came into contact spoke well of their interaction.
My own memory of him when he took part on a number of occasions in a radio talk show I hosted was of an arrogantly efficient mandarin with a short fuse. Managing a major institution charged with the care of a critical element of the national transport system requires a particular set of skills, and the ability to encourage interpersonal relations is one of them.
But he was a scapegoat, of that there's no doubt. Talk about piggy in the middle: Alli was it, shot at by all sides and left to face the unpleasant music. No wonder he's departed. Whether he was pushed or jumped of his own accord hardly matters. It is his political masters that should be facing the firing squad but, as usual, they'll get away scot-free.
IN AN article published in the David Gleason "Torque" column on 9 December 2011 titled "A wife not made of aluminium," we wrongly alleged that Mr Deripaska had falsified ownership of UC Rusal, had exercised improper influence over the Russian Foreign Ministry and the Russian court system, and had corruptly procured the expulsion of Mr Helmer from Russia. We can confirm that these allegations are entirely untrue and we apologise to Mr Deripaska for the distress and harm caused.
HAS Joseph Stiglitz - Nobel laureate, former World Bank chief economist and chairman of the Council of Economic Advisers to former US p resident Bill Clinton - lost it?
I ask because I was really nonplussed when I read in this newspaper earlier in the week that he had recommended that SA will have to manage its exchange rate and the way to do it was by printing lots of rand and buying dollars.
The one-line comment I was given by a noted local economist was as savage as it is succinct: "The recommendations reveal him as a charlatan. Gideon Gono economics." (Gono is governor of Zimbabwe's Reserve Bank. Faced with a rapidly deteriorating economy, Gono resorted to the printing presses, a process that resulted in hyper-inflation. On his watch, money supply increased by a multiple of 20-million.)
Stiglitz is accustomed to controversy. Said to be the most quoted economist on the planet, Stiglitz told a BBC audience in 2010 that "there's no problem of Greece or Spain meeting their interest payments". Wikipedia says that, when confronted with the statement "Greece's difficulty is that the magnitude of (its) debt is far greater than the capacity of the economy to service it," his response was: "That's absurd."
Given Greece's latest debt situation, which shows the country's borrowings exceed its annual gross domestic product by around 70%, that reply appears out of touch.
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