The Gauteng Provincial Government’s (GPG) commitment to repay a massive R12.9-billion portion of the failed e-toll system’s debt, despite not being the responsible party for the scheme, is expected to hamstring service delivery in the province over the coming years.
On 1 October 2024, the GPG announced that it made the first payment of R3.8 billion towards settling its slice of the total e-toll debt, with four equal annual instalments to follow over the coming years.
“The province will need to allocate a substantial amount of funds each year for the next five years to meet the repayment obligations,” said Gauteng MEC for Finance and Economic Development, Lebogang Maile.
Maile said the Gauteng provincial treasury is working with revenue-collecting departments to identify alternative sources of revenue, with public-private partnerships, donor funding, and developmental finance among the possible alternative funding sources.
“This aims to ensure that frontline services remain uncompromised, prioritising programmes that foster growth, safeguarding essential social services for vulnerable members of society, and maintaining the provision of basic services in the province,” said Maile.
While the MEC promised that the GPG would do its best to avoid compromising funding for social services such as health and education whilst it pays off its e-toll arrears, industry stakeholders believe there is a very small chance that these areas will remain completely unaffected over the next five years.
Wayne Duvenage, CEO of the Organisation Undoing Tax Abuse (OUTA), told SABC News that government will have no choice but to pull funding for vital social services to clear debt that it had no responsibility to take on in the first place.
He explains that e-tolls were conjured up by National Treasury in partnership with the National Roads Agency (Sanral) and that the GPG had no say in the matter when it was initially introduced to the public in December 2013.
As such, the GPG was not required to assume liability for outstanding debt, especially since it receives 95% of its funding from Treasury, meaning the money will simply be shifted from one government department’s account to another, and back.
However, for reasons unbeknownst to the public, the GPG agreed that it would pay around 30% of the total e-toll bill with Treasury to satisfy the remaining 70%.
“[The GPG] is now having to pull back on its funding allocations to things like hospitals, schooling, [and] social development. We know that they really have tightened their budgets on social development, and the NGOs (non-governmental organisations) that received that funding are now in a dire situation,” said Duvenage.
“So, it does matter that [the GPG] gets its budget so that it can allocate funds. Now, suddenly, there’s R17 billion that’s sucked out of the system, and residents in the Gauteng province… are suffering as a result of it.”
Don’t bite the hand that feeds you
Duvenage notes that the R20 billion total payment is far higher than the initial R17 billion that was expected from the GPG – R12.9 billion of which was intended for servicing debt and R4.1 billion for continued maintenance of the affected roads.
Authorities have explained that the R3-billion difference is to cover “interest” charged on the repayment, though once again, Outa questions why there is interest being levied on the deal at all.
“This again is where we’re asking for more clarity. I mean, here’s one government department charging interest to another government department, [assuming the R3 billion] is related to interest, and it shouldn’t be,” said Duvenage.
“So we want to know now, how is this R20 billion made up, why is it made up, and again to our original question, why on earth did [the GPG] agree to this debt in the first place.”
Outa suggests that the GPG may not have had too much say in the matter either way.
“If Treasury is the one that funds you by 95%, you don’t want to bite that hand that feeds you, and if Treasury says you will pay 30%, well then you will,” said Duvenage.
He called on the GPG to be more transparent regarding the e-toll repayments and to explain to its citizens why they must shoulder the financial and service-related consequences of a failed initiative introduced by national entities.
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