E-Tolling and fuel refinery upgrades were the main areas of discussion between key industry stakeholders at an automotive breakfast in Sandton. Though the panellists say the South African commercial vehicle and logistics industry are relatively buoyant serious risks lie on the horizon.

Panellistswho shared their views included Kobus van Zyl, Vice President of Mercedes-Benz South Africa Commercial Vehicles (MBSA CV); Wayne Duvenage, Chairperson of the Opposition to Urban Tolling Alliance (OUTA); Robin Barker, Executive General Manager of Regent Insurance Commercial Lines (RCV); Fani Tshifularo, Executive Director of the South African Petroleum Industry Association (SAPIA) and Garth Bolton, Joint-CEO of Cargo Carriers Limited and a board member of the Road Freight Association.

Van Zyl started the discussion on a positive note: “In South Africa, while the economic outlook appears quite bleak at the moment, it’s definitely not as bleak as it was during the previous financial crisis.

“We see the commercial vehicle market as being quite flat at the moment, but we also see a lot of resilience and ideas being implemented by various transport operators and manufacturers alike to not only maintain position and profitability in this period but, surprisingly, to increase it.”

Duvenage revealed that the next step in OUTA’s court challenge regarding e-Tolling was the organisation’s case to be heard in the Supreme Court of Appeal, which he believed would take place in August or September.

Most of the paperwork for the case had already been done, however. “If we win, we have no doubt it will be appealed to the Constitutional Court. If we lose we’ll need to decide what we want to do,” he said.

Duvenage did not mince his words in terms of e-Tolling, stating: “Why would you want to go and pay R1,5- to R1,7-billion a year to just administer a collection process, when the road infrastructure costs are about R1,9-billion a year with interest over 20 years? It’s irrational, highly expensive and very inefficient.”

Duvenage said that six months after the interdict had been set aside to allow authorities to start e-Tolling; they had been unable to effect implementation. “It’s too onerous and very complicated. Our grandchildren are going to continue to pay for the freeway upgrade. E-Tolling is going to raise over R120-billion for a road network that cost R36-billion plus interest to upgrade. That cost is going to be passed on to the consumer.”

Fundraising remains a pressing issue for OUTA, with Duvenage explaining: “We have successfully raised over R8-million, so we’ve got to be mindful of the fact that business and communities have come to the party. However, the cost of our case is going to be closer to R12-million, so we’re only two-thirds of the way there: we’re behind – the lawyers are waiting for money.

“We know a lot of people are saving millions of rands through our actions and should be assisting us, but it’s been 180 businesses and 2 500 individuals and families that have given us the money.”

Introducing a fresh angle on the e-Tolling debate, Barker noted: “From the insurance perspective, some of the challenges which we’ve thought of are those that relate to smaller trucking businesses which may avoid some of the larger roads and try and use ancillary routes, presenting a set of issues from a safety perspective.

“Potentially what you have is large vehicles driving down roads that they shouldn’t be on – what would happen if it becomes economically unviable for a trucking business to use the roads that they are presented with?” he asked.

Bolton added: “The RFA has been placed in an invidious position with regard to e-Tolling, in that the trucking industry has been offered significant discounts to use the affected routes during off-peak times of day.

“What was mooted as a 12c per litre levy on fuel in place of a toll fee would prove to be far more expensive for national fleets – the tolls affect only 185km of freeway in Gauteng. If the Road Freight Association were negotiating for the fuel tax option we’d be working against the interests of our members, so it’s put us in a very difficult position.”

When the discussion switched to the topic of the South African Government having identified 2017 as the year by which fuel should meet the ultra-clean 10ppm sulphur specification, panellists were again vocal in their opinions.

Tshifularo cautioned that the deadlines set by Government could prove unrealistic: “Between now and 2017 we need to enable motor manufacturers to introduce new vehicle technology. In this regard we are having discussions with Naamsa and the Department of Energy.

“There are deadlines which have been set, but I don’t think we’re going to meet them. If you look at the Governmental document, it talks about 2013 as introducing early enabling fuels: I don’t think we’re going to meet that deadline. The specifications are not yet finalised, and are still being discussed.”

The cost of upgrading South African refineries to produce 10ppm diesel was another pressing concern. Tshifularo said: “It’s going to cost a lot of money: almost R40-billion. We’ve just received an indication from the Minister of Finance that there will be support for the refineries to upgrade their facilities, but until we know what kind of support we’re talking about it’s going to be very difficult for shareholders to be able to decide whether they want to proceed with upgrades or not.”

He added: “You must remember that on average the oil companies have sold stakes to BEE shareholders – another complication because, if you’re talking about upgrading refineries to the tune of R40-billion, it means that each and every shareholder must contribute towards that pot.

“Are all shareholders, including BEE shareholders, prepared to chip in to this nil-return investment? Remember, if you don’t get any assistance from the Government, you get nothing in return for this investment,” concluded Tshifularo.