Southern African Vehicle Rental and Leasing Association - PowerPoint PPT Presentation

Southern African Vehicle Rental and Leasing Association presentation to Gauteng e-Toll Panel Midrand, September 8 2014

OVERVIEW  SAVRALA welcomes the opportunity to again present its e-Toll concerns.  SAVRALA supports the delivery of the Gauteng highway upgrades, the current ongoing alternate road upgrades and the progress towards a reliable, safe, efficient and economical integrated public transport system.  Despite its opposition to the GFIP funding method, SAVRALA members have implemented e-Tolls. SAVRALA presentation to Gauteng e-Toll 2 Panel 8 September 2014

OVERVIEW: PANELS GFIP AND ETOLLS SCOPE  SAVRALA would like to offer its input to assist the panel assess the socio economic impact of GFIP e-Tolls as outlined by the invitation; DIRECT INDIRECT a) Economical and Social Impacts COSTS b) Impact on the Environment BENEFITS c) How and where are the costs and benefits distributed across society and the economy WE SUPPORT THE PANEL, AND THE GAUTENG PROVENCE, EFFORTS TO FIND AN EFFICIENT, EFFECTIVE, EQUITABLE AND BROAD BASED ACCEPTABLE GFIP FUNDING SOLUTION SAVRALA presentation to Gauteng e-Toll 3 Panel 8 September 2014

CONTENT 1. SAVRALA - introduction 2. “User pay’’ policy observations 3. Overview of SANRAL engagement 4. The system 5. Cost benefit GFIP analysis 6. Proposals to consider 7. Conclusion SAVRALA presentation to Gauteng e-Toll 4 Panel 8 September 2014

1. SAVRALA - INTRODUCTION  Established to ensure that members maintain highest standards of service, ethical and trading practices.  Industry is self-regulated and members commit to SAVRALA’s Constitution and Code of Conduct (www.savrala.co.za).  SAVRALA represents members interests and seeks to constructively engage with its stakeholders.  National Executive Council (NEC) is drawn from the industry but retains a General Manager. SAVRALA presentation to Gauteng e-Toll 5 Panel 8 September 2014

1. SAVRALA – INTRODUCTION (Cont’d)  General car rental forecasted statistics - 2014; o Annual revenue to exceed R5bn o Average fleet 65,000 (utilisation 72%) o Annual number of rentals 2,7m  Some key car rental concerns: o Increasing cost of new vehicle prices o Poor driver/renter behavior o Impact of new Tourism B-BBEE scorecard o E-toll administration o Traffic fine/infringement redirection (ie: AARTO)  Positively engages with stakeholders to find mutually beneficial solutions SAVRALA presentation to Gauteng e-Toll 6 Panel 8 September 2014

2. “USER PAY” POLICY OBSERVATION  Policy suggests a change in behaviour through pricing A usage charge for Does not Tourism respond to activity? ‘usage’ SAVRALA presentation to Gauteng e-Toll 7 Panel 8 September 2014

2. “USER PAY” POLICY OBSERVATION  Policy suggests the ‘user’ should pay for a service. Implies no cross subsidisation for an identified service. SAVRALA presentation to Gauteng e-Toll 8 Source: Tax Statistics 2013 Panel 8 September 2014

2. “USER PAY” POLICY OBSERVATION SAVRALA presentation to Gauteng e-Toll 9 Source: Tax Statistics 2013 Panel 8 September 2014

2. “USER PAY” POLICY OBSERVATION  Gauteng tax assessed rands has declined from 51.9% (R99bn) to 50.4% (R104bn) of growing total, while maintaining a similar 40% proportion of tax payers during period of GFIP SAVRALA presentation to Gauteng e-Toll 10 Source: Tax Statistics 2013 Panel 8 September 2014

2. “USER PAY” POLICY OBSERVATION Gauteng remains dominant GDP contributor SAVRALA presentation to Gauteng e-Toll 11 Source: www.beta2.statsa.gov.za Panel 8 September 2014

2. “USER PAY” POLICY OBSERVATION Total Vat collections R215bn. At 35% GDP, as a proxy, Gauteng receives back just a little more than its Vat contribution of R75bn. Gauteng’s PIT , Corp tax, fuel levy etc effectively all gets redistributed to other Prov’s . SAVRALA presentation to Gauteng e-Toll 12 Source: www. Treasury.gov.za Panel 8 September 2014

2. “USER PAY” POLICY OBSERVATION Motor Vehicle Licence does not recognise actual local or national road (ie: GFIP) usage SAVRALA presentation to Gauteng e-Toll 13 Source: www. treasury.gov.za Panel 8 September 2014

2. “USER PAY” POLICY OBSERVATION SAVRALA presentation to Gauteng e-Toll 14 Source: www. Treasury.gov.za Panel 8 September 2014

2. “USER PAY” POLICY OBSERVATION - SUMMARY  ‘ User pay’ theory offers an approach to change behaviour and manage resources when reasonable alternatives are available. A narrow view in the context of building a democratic development state is questionable. o Presidential Review Committee on SOE’s: Recommendation 21 “Funding of social infrastructure, including roads, should have less reliance on the ‘ u ser pay’ principle and more on taxes” o NDP -2030: Transport (p184) “Decisions should take South Africa’s developmental goals into consideration and guard against adopting transport approaches not aligned with South Africa’s priorities or resources” “Instead of focusing on a particular transport mode, emphasis should be placed on a total transport network”  Gauteng tax payers contribute for delivery of services in other Provinces  Gautrain and other modes of public transport (excluding mini bus taxis) are subsidized by non-users nationally 15  Goal must be to develop equitable integrated public transport solutions

3. OVERVIEW OF SANRAL ENGAGEMENT  Adequately traversed in the various legal records but SAVRALA was not pro-actively engaged to review the details of the proposed GFIP e-Toll plan.  SAVRALA introduced RMI and NAAMSA to e-Toll project team.  SAVRALA members engaged with SANRAL for almost 18 months prior to legal action.  Where the system permitted, some changes were made but industry wanted a simple solution. A proposed daily fee for vehicles, which could be reviewed monthly, was not accepted.  In other countries, car rental toll fees processed via an intermediary.  Industry argued need for efficiency and cost effectiveness of funding solution. SAVRALA presentation to Gauteng e-Toll 16 Panel 8 September 2014

3. OVERVIEW OF SANRAL ENGAGEMENT  SAVRALA members agreed to adopted parallel actions prior to launch: o Support the legal opposition process against e-tolls o Members to commence tagging of fleet and get e-toll ready  Since implementation, the e-toll system has generally stabilized but, as expected, the maintenance of the system remains a challenge  Once vehicles e-tagged, registered and IT systems integrated, the system processes transactions, however, the challenge becomes much greater when validation checks etc are applied  Delivery of late transaction files remains a challenge SAVRALA presentation to Gauteng e-Toll 17 Panel 8 September 2014

4. THE SYSTEM Order tags and brackets for fleet Vehicle Register defleeted and tag e-tags on recycled to a TCH new vehicle Car Rental Distribute e-Tag e-tags to Billing Cycle various Lifecycle depots Vehicle Link e-tag returns from and vehicle rent. Check with TCH e-tag present Vehicle goes on rent and accumulates toll fees

4. THE SYSTEM Toll files received daily from Sanral. Owner responsible for payment not user Renter invoiced Queries Raised Billing Cycle Toll fees added to Daily Financial file rental within +/- paid by Car 24 hours of Rental Company vehicle return When vehicle returns, cumulative toll fees for period linked to vehicle registration

4. THE SYSTEM  Given the movements, car rental fleets have to be e-tagged nationally. Some have e-tagged regional fleets.  E-tag brackets not universal but industry advised one type will be used. Remember, industry constantly upfleeting and defleeting, within 12 months both their own and lease vehicles.  While smaller members manage manually, larger members developed new systems to track boxes and individual e-tags between centres.  Industry had to implement new procedures, policies and training.  Industry must pay within 7 days while customers pay afterwards. Accounts/corporate might only pay after 30-60 days after transaction. SAVRALA presentation to Gauteng e-Toll 20 Panel 8 September 2014

4. THE SYSTEM  Systems then had to cater for exemption categories on a pay now and claim back later process which is proving to be very cumbersome.  System requires an e-tag and matching registered vehicle to transact. Providing VLN alone will not trigger transactions which will proceed to VPC.  SANRAL allocates payment by oldest invoice and not invoice number which is problematic for account reconciliations.  Credit request system for cloned plates, old/incorrect eNatis details and redirecting (individually) charges is very cumbersome  Billing of e-tolls does cause customer dissatisfaction with so many tariffs (eg : standard v’s e -tag rate, time of day etc) applicable. SAVRALA presentation to Gauteng e-Toll 21 Panel 8 September 2014