Friday, December 14, 2012

S.Africa court gives green light to Jo'burg road tolls

JOHANNESBURG (Reuters) - The South African government won a High Court decision on Thursday to allow tolls on Johannesburg's heavily travelled highways, easing pressure on the central budget, which had been called on to help pay for the nearly $3 billion upgrade.

The High Court overturned an application to have road tolls scrapped around the economic hub of Johannesburg and Pretoria, saying the government had the right to set fiscal policy.

The ruling African National Congress faced major protests from an unlikely coalition of labour, business and motorists who said the tolls would place too much of a burden on the poor and stoke inflation in Africa's largest economy.

The problems with rolling out the tolls raised worries about the financing for massive infrastructure plans proposed by President Jacob Zuma's government to reduce chronic unemployment and bolster growth.

Other state-owned companies such as rail agency Transnet plan to use the road agency's model to borrow from bond markets to fund 300 billion rand in infrastructure spending.

Ratings agency Moody's downgraded South Africa's roads agency in February as public pressure forced the government to reduce the proposed toll fees.

Even with the court decision, the implementation of tolls is still some way off with labour federation COSATU, in a governing alliance with the ANC, threatening mass civil disobedience and a challenge in parliament.

Zuma, who is seeking re-election as leader of the ANC at a party meeting next week, has often backed labour-friendly policies to placate COSATU, whose 2 million members have been a powerful vote-gathering machine for the ruling patty.


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