News Room

E-Tolls Receive R5.6 Billion Bailout

Author: Jason Snyman
Date: 2019-03-13
Instead of fixing our pothole-cratered roads, and despite clear public disdain and opposition, the government has thrown the failed e-toll system a R5.6 billion lifeline. It lives to waste another day.

The Department of Transport has transferred R5.7 billion from its medium-term budget to the South African National Roads Agency (Sanral) in order to cover the rising debt incurred due to the non-payment of e-tolls.

We could smell this fiasco coming a mile away. In November of 2018, we released an article covering the potential impact of e-toll non-payment, and one of the downsides we listed was that Sanral would soon run out of money – having already taken R1.6 billion out of its road maintenance budget to cover e-toll shortfalls. The public was rightfully disgusted; and the sentiment was clear:

If we don’t pay our e-toll fees, the roads, the taxes and the Treasury will pay them for us.

Of course, the Treasury has now said that it won’t be granting the project any funding – all of our money is already going to bailing out the SABC (currently negotiating a R3 billion bailout), SAA and Eskom. The Department of Transport has deemed it necessary to intervene and reprioritize its mid-term spending.

On the decision to bail the disastrous e-toll project out of trouble, Minister of Transport, Blade Nzimande said:

As a result of Sanral’s toll network experiencing financial difficulties, and to ensure that Sanral complies with its payment terms to investors, as well as to maintain the toll network across the country, funds were transferred from the non-toll network to the toll network.

That’s disheartening news for Gauteng motorists – who were so close to seeing the e-toll project scrapped entirely. The crippled e-tolls have received another kiss of life from the ANC – and the money-wasting circus continues. 

Last year, Gauteng premier, David Makhura – who understands how burdensome the system is to motorists – said that e-tolling has no future in Gauteng. Unfortunately, there’s still no clarity – from provincial or national government – on whether the failed system will ever be scrapped. 

Solving The E-Toll Crisis

It’s time for the government to seriously investigate the other policy options available to service the Gauteng Freeway Improvement Project – this is according to the Organisation Undoing Tax Abuse (Outa), commenting on the announcement. 

Some of the possible alternatives mentioned include:

• The renegotiation of the debt with the PIC; 

• The reassessment of budget reallocations by Treasury to cover the debt;

• Ring-fencing a small part of the fuel levy for the GFIP.

This last option has been rejected by the Treasury in the past, but Outa believes the time has arrived to reconsider it.  

According to ETC – the Austrian electronic toll collection company tasked with collecting e-toll fees in South Africa – the current system is more than adequate to pay for our roads and debt, and there is no need to skim from the fuel levy. The problem, the company says, is that the government has failed in every conceivable way in getting the disgruntled, untrusting public to pay up.

Tolling is an accepted and effective method of funding road infrastructure all around the world, but with corruption rampant and the taxes being piled on by the minute, its little wonder why the public flat out refuses to support any South African government initiatives. 

Government should come to grips with the real reasons behind non-compliance, instead of being the worker who forever blames his tools,” said the Austrian group.

Another possible solution: Outa believes that the three main toll concessionaires on long-distance tolled roads may still owe Sanral a portion of those profits. 

Outa’s Transport Portfolio Manager, Rudie Heyneke, said:

We believe that Government has kicked the e-toll can down the road for too long now, and every day the scheme is left to continue in its failed state, the problems for Sanral will continue to grow.

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