Political support and efficient communication between the public, concessionaires and governments are key to toll road implementation in Africa, African Investment Infrastructure Managers infrastructure equity fund manager Mikesh Pema said on Thursday.

“It is cardinal to get public buy-in to ensure successful toll road implementation in Africa. This can be achieved by focusing on effective customer service. The public must see the benefit of paying toll fees and concessionaires should seek to deliver continued improvement,” he stated at the sixth Africa Roads convention, in Sandton.

Adding to this, he said it was important that concessionaires involve governments in the toll-rate setting process.

Further, user-pay discount models were also expected to assist in gaining public support. “Discounts counter public and anti-toll sentiment by reducing the financial burden, particularly for users residing near a plaza,” Pema stated.

The failure of many proposed tolling projects in Africa has pointed to the importance of experienced implementation authorities and trustworthy project partners.

“Solid long-term relationships with principal parties are needed to create the flexibility required to accommodated changing requests; similarly, strong active management expertise is required to drive appropriate mechanisms and procedures to mitigate risks.

“Concessionaires and governments must realise that only certain road sections are viable for toll roads,” he noted.

Further, to ensure the success of toll road projects, understanding the risks associated with different currencies was central, especially in Africa with its 54 countries.

“Sources of funding must be matched to the currency of the revenue, identifying what portion of expenditure will be in foreign currency, through many structures can assist in mitigating this risk,” Pema said.

Speaking to the challenge of tariff collection, N3 Toll Concession CEO Neil Tolmie said the safest option for concessionaires involved in toll road projects would be to adopt tried and tested models, such as the South African National Roads Agency Limited’s electronic toll collection system.

The system enables governments and concessionaires to count the vehicles that move through the toll gate and get paid accordingly by the operator.

“To sustain collection, service offering to the public must be central, by increasing safety, convenience and mobility,” Tolmie reiterated.

ATTRACTING INVESTMENT

A study by the World Bank showed that about $93-billion a year is required to improve Africa’s infrastructure, of which almost half is needed to boost the continent power supply.

Pema noted that an estimated $3-trillion was available internationally in terms of infrastructure investment, a pool into which Africa had to tap into.

However, key to secure private sector investment was matching investor needs with Africa’s infrastructure dynamics.

He added that the perception of political risk in Africa has made foreign private investors wary; however, over the past ten years greater broader entrenchment of demographic policy in key markets on the continent has shrank this caution.

“To access capital, Africa must create a platform for investors and give them some guarantee that their investments are secure.”

WHY TOLL ROADS?

Pema said toll roads could assist African governments in acquiring needed capital to maintain and upgrade road infrastructure.

“Governments across the continent simply do not have sufficient funds to build roads and are also increasingly accepting private investment as a solution to improve road infrastructure in Africa.”

Bakwena Platinum Corridor CEO Graeme Blewitt added that toll roads could play a key role in unlocking South Africa’s resources wealth, adding that the primary trade routes into South Africa, especially from landlocked countries in the Southern African Development Community supported toll roads.

Blewitt attributed this to the notion that the sections of the routes that are tolled, are generally managed more efficiently, thereby improving safety, efficiency and the costs of products transported.

Poor road, rail and harbour facilities are said to add between 30% and 40% to the cost of goods traded among African countries.

“The cost of products is impacted by inefficiencies such as delays owing to general congestion, poor road management and corruption on the roads and at boarders. This can be addressed through tolling.”

In this regard, Blewitt welcomed the Gauteng e-toll system that will reach operational mode at the end of April.