The SA National Roads Agency (Sanral) has dismissed suggestions that the user-charge principle used to justify e-tolls will be undermined if motorists are forced to pay for the expansion of the Gautrain.
The possibility of motorists paying for the Gautrain expansion was confirmed by Gautrain Management Agency (GMA) CEO William Dachs, when he commented on engagements between National Treasury and the Gautrain Management Agency (GMA) about funding the expansion.
Sanral general manager for communications Vusi Mona said it continues to affirm the view that e-tolls remain in place and, until otherwise directed, road users are expected to pay.
“Sanral remains firmly of the opinion that the user-pay principle is a worldwide accepted principle which Sanral supports,” he said.
The future of e-tolls
Finance Minister Tito Mboweni will possibly make an announcement about the future of e-tolls in his medium-term budget policy statement (MTBPS) speech on Wednesday.
In his MTBPS speech in October 2019, Mboweni said that the government had decided to retain the user-pay principle and e-tolls on the Gauteng Freeway Improvement Project (GFIP), urging motorists to pay their e-tolls.
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However, in November 2019 the government back-tracked on Mboweni’s comments.
Mona declined to comment on the engagements between Treasury and the GMA, stressing that “Sanral is not in a position to comment on the Gautrain’s funding model”.
He also declined to comment on the possible implications to the e-toll system on the GFIP of any government deviation to the user-charge principle.
“Sanral cannot comment on speculations that are made by Outa [the Organisation Undoing Tax Abuse],” Mona said.
Mona’s comments follow GMA CEO William Dachs confirming last month the GMA has engaged with Treasury about the other sources of funding for the Gautrain expansion project.
“We firmly believe the people in cars don’t pay their fair share in terms of the taxes that they pay and the failure of the e-tolls system has perpetuated that problem,” he said.
Dachs added the GMA’s engagement with Treasury on the funding of the expansion “looked at everything from general tax increases to fuel taxes to fuel levies to congestion charges” through to more traditional funding sources and charges for developers around Gautrain stations.
Outa CEO Wayne Duvenage stressed that the notion of having Gauteng road users taxed or tolled to finance the upgrade of the Gautrain is in direct contrast to the user-pays principle.
“I think government is notorious for speaking with a forked tongue when it comes to changing its tune to suit its conflicting agendas,” he said.
Duvenage claimed that Sanral’s own financial statements in the agency’s annual reports for 2015 until 2019 show that it aimed to collect 29% of its total income from 1% of its tolled road network based in Gauteng in this period.
He said obviously these were the revenues Sanral billed and expected to achieve had motorists complied, which unfortunately for Sanral was not the case.
“There is no fairness in the user-pays principle with those figures, whereby Gauteng motorists would have generated 29% of Sanral’s revenue from 1% of their road surface,” he said.
Transport Minister Fikile Mbalula confirmed in November 2019 that a cabinet decision on the controversial scheme would be taken in the next two weeks.
This followed President Cyril Ramaphosa earlier in 2019 appointing Mbalula to head a task team to report on the options available for the future of e-tolls by August 2019.
The appointment of this task team was prompted by staunch public resistance to e-tolls and the low e-tolls payment compliance rate, which is now below 19%.
A government announcement about the future of e-tolls was subsequently delayed at the end of 2019 until the first cabinet meeting of this year, but the government has continued to dither since then without publicly announcing any decision on the scheme.
However, Mbalula’s spokesperson Ayanda Allie Paine confirmed two weeks ago that the government is deliberating about the future of e-tolls on the GFIP “as we speak” but stressed there is no indication yet when cabinet will make an announcement.
In a presentation to the Parliamentary Select Committee on Transport earlier this month, Sanral revealed that the Auditor-General had drawn attention in an emphasis of matter to “material impairments – trade and other receivables” at the agency related to the recognition of expected credit losses (impairment) of R10.177 billion.
Of this impairment, R9.831 billion relates to the impairment of e-toll receivables.
Sanral said its funding was negatively impacted by the fact that the future of e-tolls is still not resolved, resulting in low payment compliance that negatively impacts on Sanral’s ability to finance its toll portfolio in the short term.
It said this short-term funding shortfall in the toll portfolio was addressed by transfers from the non-toll portfolio, which reduced its budget for new projects.
Sanral said this reduction in its budget for new projects amounted to R5.75 billion in 2018/19 and R2.5 billion in 2019/20 while R2.53 billion had been transferred so far in 2020/21.
Sanral’s non-toll allocation has also been reduced by R1.1 billion because of the impact of Covid-19 and lockdown regulations on the availability of future funding.
It reported a profit of R1.2 billion for its 2019/2020 financial year compared with the R2.4 billion profit reported in its previous financial year.
This article first appeared on Moneyweb and was republished with permission.