The Gauteng government will employ a new “revenue enhancement strategy” to service its R12 billion in outstanding debt accrued by the failed e-toll system.
This strategy will see the province invest in initiatives such as an expansion to the Gautrain, the additional revenue of which will then be allocated to repay its e-tolls arrears, instead of using investor funds to service debt directly.
The electronic toll collection process was officially brought to an end in April 2024 with many loose ends that must now be tied up by the various stakeholders.
E-tolls may be gone, but their debt is here to stay
Gauteng Finance and Economic Development MEC Lebogang Maile announced in his recent budget speech that the province should hopefully soon have an answer to the many questions hanging over the e-toll debacle.
E-tolls were shut down on 11 April 2024 in the lead-up to the national elections, and while the government made a big spectacle of ending the much-derided system that it has forced on its population in the first place, it has yet to provide a solution to the various problems created by the programme.
The main issue concerns the tab accumulated by the unsuccessful tolling project, estimated at R43 billion, which will be split between the Gauteng Provincial Government and the National Treasury.
The two stakeholders previously reached an agreement where the province will be responsible for 30% of the sum (roughly R12 billion), while Treasury will take responsibility for the remaining 70% (R30 billion).
The long-standing question has been where the funds for Gauteng’s end of the deal will come from.
During Gauteng’s budget speech back in March 2024, former MEC for finance Jacob Mamabolo stated that the province had approached financial institutions to borrow the money needed to pay off the debt, while also taking on over R4 billion worth of maintenance backlogs.
Adding to this financial burden is the fact that the National Treasury has cut the budgets of all nine provinces including Gauteng, which is losing out on approximately R15 billion in funds, according to BusinessTech.
Maile said the rejection of e-tolls has added an additional R20 billion to the deficit, so the province is now R35 billion in the red on its balance sheet.
However, the MEC said that the province has the capacity to recover, as it was able to raise R36 billion in its last term.
Gauteng is still in talks with a “financial institution” to cover its e-toll loan, and Maile said that the application should be completed by September.
He did not reveal which financial institution would be supplying the funds, but assured that it is a reputable provider that is locally based and that the loan would be rand-denominated.
The province is on track to make its first payment of R3 billion towards the e-toll debt in September.
“We hope that by this time we will be able to make everything public and explain all the terms and conditions and arrangements with Sanral and the Department of Transport and National Treasury,” he said.
As for paying back the loan, Maile revealed to Moneyweb that Gauteng plans to use a new “revenue enhancement strategy.”
The MEC referred to the Gautrain as an example, explaining that the province would rather borrow money to finance something like its train network because it would generate revenue that would be able to repay the debt.
Maile said that revenue generation strategies would play a part in its finances going forward, but that further details would only be released at a later date.
“We will raise money to invest in infrastructure because we want to see long-term benefits,” he said.
“We want to raise money to finance the economy, not to finance debt.”
Boycotters beware
Another matter that has yet to be cleared up concerns the road users who still have outstanding payments.
There have been mixed reports concerning motorists’ debt since it was first announced that e-tolls would be cancelled, as it was suggested at one point that complaint drivers would be refunded.
However, this statement was never elaborated on, and the much more clear-cut response from the government is that road users are required to pay what they owe.
Former Transport Minister Sindisiwe Chikunga previously stated that people are expected to settle their accounts, but that the province is still investigating how it will go about enforcing these payments.
Suggested methods include blacklisting individuals with outstanding sums to affect their credit scores, withholding new driver’s licenses, or garnishing wages and seizing personal property.
This announcement was met with backlash from groups like AfriForum and the Organization Undoing Tax Abuse, which argue that motorists cannot suddenly be expected to pay for a system that they rejected for years.
These organisations have pledged to provide legal assistance to anyone who the government comes after regarding their e-toll bills, provided they have the resources to do so.
As things currently stand, there is still no answer as to what will be done about the billions owed by road users who did not comply with the tolling scheme.
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