Internationally there is a movement towards more sophisticated methods of road tolling to generate funds for road building and maintenance, including vehicle miles travelled and weight miles travelled user fees. Fuel taxes do not capture distance‐related externalities closely because they are insensitive to time and location, and fuel consumption is only weakly correlated with vehicle characteristics such as size and axle weight that contribute to congestion, accidents and road damage.

There is growing evidence that distance based user charging is the most efficient method, especially on a national basis. It can be implemented in a number of ways including: automatic number plate recognition using fixed cameras, short range sensors together with tags or global navigation satellite systems (GNSS). GNSS allow the full network to be included in the charging system. However, these systems are often complex to implement and administer – particularly in comparison to fuel taxes – and may be met with resistance from users.

## **Box 7: International examples of road user pricing reforms**

In 2006 Namibia introduced a mass‐distance charging (MDC) system to recover the excess variable cost for HGV’s that cannot be recovered using fuel levies only. MDCs are expressed in terms of a rate per distance and rates increase with the weight of a vehicle. Initially the MDCs were based on the mass of HGV’s and was payable annually on the basis of an assumed average travelling distance. However, this was strongly resisted by the organized trucking industry as the payment was based on an assumed distance travelled instead of actual distances. In 2007, a revised system was introduced based on self‐assessments for the actual distances travelled in Namibia per annum.

Several methods of road user charging have been used across EU countries, including tolling systems based on a period of time (time vignettes), network wide electronic tolling and concession tolls. Distance based charging systems are considered to be the ideal long‐term solution, and has the most support from industry who considers it the fairest way to charge road users. Distance based systems have been shown to be the most effective in reducing empty running and vehicle kilometers.

The Netherlands and Switzerland implemented whole‐of‐network charging, which monitors individual road use of all urban and non‐urban roads based on a combination of distance, mass and location. In the Netherlands, this system has been successful in ensuring full cost recovery for infrastructure, improved allocation of infrastructure investment and a strong demand management tool.

In Germany, a distance based charging scheme on HGV’s came into operation in 2005. Germany implemented heavy vehicle charging, which is a limited application of whole‐of‐network charging, to target the heaviest contributors to road damage. The system uses satellite‐based technology with other technologies. The HGV’s charge applies to vehicles over 12 tons using 12,000 km of federal motorways, and is a function of the distance traveled, the number of axles and emissions class. The system has exceeded expectations in terms of reliability and enforcement and has led to reductions in empty truck trips and an increase in the proportion of trucks that meet high emissions standards. Collection costs amount to 15 to 20 percent of revenues. These costs are comparable to those for established infrastructure based urban systems and they are likely to decrease with advances in technology and experience.

_Source: SADC Protocol on Transport, Communications and Meteorology in the SADC Region (1996)_

# _5.2 Private sector participation to increase investment and improve service delivery_

Introducing greater private sector participation in the freight rail system and port operations can be a valuable tool to improve access and is likely to deliver improved reliability.

# <u>Status of private participation in freight rail</u>

The private sector is already a railway operator in South Africa, but only on private lines. For example, Arcelor Mittal, the South African steelmaker, operates 170km of rail track and 34 locomotives within _25_