Roy Cokayne
2 minute read
30 Oct 2019
4:01 pm

Sorry, e-tolls are here to stay, says Mboweni

Roy Cokayne

The government has decided to retain the user-pay principle and e-tolls on the Gauteng Freeway Improvement Project (GFIP).

Picture: Michel Bega

The decision is virtually certain to result in an intensification of the e-tolls dispute and confrontation between government and the Organisation Undoing Tax Abuse (Outa).

It would appear that Finance Minister Tito Mboweni has also won the e-toll battle with Gauteng Premier David Makhura, who earlier this year in his State of the Province address repeated that e-tolls would be scrapped.

Transport Minister Fikile Mbalula, who was appointed by President Cyril Ramaphosa to head a task team to report to him on the options on the table with regard to e-tolls by the end of August, also appears not to have achieved the ‘win-win’ solution for government and society that was his publicly stated aim.

‘Value-added services’ to come

However, Mboweni said on Wednesday in his Medium-Term Budget Policy Statement (MTBPS) speech that there would be a further dispensation and value-added services while compliance would also be strengthened.

“Cabinet has considered several options to resolve the impasse over the Gauteng Freeway Improvement Project,” he said. “Government has decided to retain the user-pay principle.

“Not paying your tolls has already led to our roads deteriorating. We have been unable to maintain the network.

“I urge the nation to please pay your bills.

“We need to build a culture of payment, as government services can only be sustainable if all of us that can pay for services, do so,” he said.

E-toll payment compliance levels are currently estimated to be at about 30%, with Outa maintaining that global evidence suggests that compliance levels of 95% and higher are required for a toll road project to be successful.

Wayne Duvenage, the chief executive of Outa, stressed in July this year when Mbalula was appointed to head the task team that e-tolls could not be resurrected and indicated that the organisation was willing to assist government in finding legitimate solutions to end the e-tolls impasse.

The alternatives

These solutions included renegotiating the debt with the Public Investment Corporation (PIC); terminating the collections contract with Electronic Toll Collections (ETC) because this was a massive and unnecessary cost; and reassessing the national budget to include allocations by National Treasury towards debt, including a possible allocation from the fuel levy.

The SA National Roads Agency (Sanral) has since 2014/15 incurred annual average losses of R1 billion and is not generating sufficient cash from its toll portfolio to settle operational costs and debt redemptions falling due over the next three years.

Government has extended a total guarantee facility of R38.9 billion to Sanral, of which R30.3 billion had been used by end-March this year.

Over the medium term, Sanral is expected to repay R10.7 billion of maturing debt obligations and R10.8 billion worth of interest payments.

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