The Gauteng Provincial Government (GPG) this week made its first payment of R3.8 billion to the South African National Roads Agency (Sanral) in relation to the portion of e-toll debt for which it took responsibility.
The GPG now claims that it owes Sanral and National Treasury the equivalent of R20 billion, a number that has raised quite a few eyebrows.
Mainly, Wayne Duvenage of the Organisation Undoing Tax Abuse (Outa) questions how the debt has suddenly ballooned to this enormous figure when just a few months ago it was set at R12 billion with R4 billion in additional maintenance fees.
“Our first question is, when did it get to R20 billion? It was R12 billion for the outstanding contribution to the Gauteng Freeway Improvement Project’s debt and then there was about R4 billion for some maintenance towards these roads,” Duvenage told Newzroom Afrika.
“We just don’t know where does this R20 billion come from, they really just cannot explain where this money and where this debt is coming from.”
In fact, Outa contends that the GPG should not pay a single cent towards the e-toll debt and should never have agreed to fund a portion of it as the province neither came up with the idea for the tolling scheme nor owns the roads on which the gantries were installed.
“Be that as it may, [the GPG] is now setting out to settle some of this debt, and well, it has to cut its cloth to do this under very tight financial conditions at the moment because they are almost broke as a province,” said Duvenage.
“Our belief and view is that the provincial management right up to Panyaza Lesufi has just really got it wrong and shouldn’t have entered into this debt in the first place.”
The consequences of provincial funds being siphoned to pay debt on a failed system it had nothing to do with are dire.
Social services as well as non-governmental organisations (NGO) in Gauteng that receive state funding will be the first to feel the pain.
“Already last year we saw social services suffering and many NGOs that used to be funded by the province are no longer funded… we’ve seen recently hospitals that are being decimated through poor management and lack of funds,” said Duvenage.
Ongoing and upcoming infrastructure projects have been and will continue to be affected by the GPG’s e-toll burden, too.
“So you and I, the public, we suffer as a result of this,” said Duvenage.
Outa sees the e-toll debt as entirely unnecessary and is of the view that all R43 billion in outstanding debt should never have existed.
National Treasury covered the bonds for Sanral when the latter originally took out the R21 billion loan for the Gauteng Freeway Improvement Project with the GPG not being involved in the process at all.
“We’ve done our sums, over the years that Sanral has had to settle this debt of the Gauteng Freeway Improvement Project, Treasury has already given them R26 billion,” said Duvenage.
“Had they been using those funds wisely plus the R7 billion or so that they got from the few motorists who paid, they would have settled all of this debt, so we just cannot understand how there was any debt to settle in the first place.”
Additionally, Treasury gives the GPG approximately 95% of its funds on an annual basis, meaning much of these monies will simply be rerouted back to national coffers through the province’s e-toll payments.
“If Gauteng gets its money largely from National Treasury, National Treasury should have settled the debt which it entered into backing those bonds with Sanral in the first place,” said Duvenage.
“This has got nothing to do with the province, it’s got everything to do with national departments.”
Gauteng’s debt repayment strategy
Apart from borrowing funds to settle its e-toll debt, the GPG has revealed that it has devised a new “revenue enhancement strategy” that 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-toll arrears.
The GPG is in the process of upgrading the Gautrain from its original 80km to a network spanning a considerable 230km to service a larger part of the province and connect previously underserved communities to the country’s main economic hubs.
Additionally, it aims to enhance revenue generation for the commuter railway by further developing land the Gautrain Management Agency already owns for lease to other businesses, and increasing its driver’s licence services.
Once complete, the expanded Gautrain should add roughly R5 billion to Gauteng’s GDP during a typical year of construction, and R12.44 billion during a typical year of operations, the proceeds of which will go towards e-toll repayments.
Through initiatives such as the Gautrain extension and others like it, the GPG will simultaneously bolster the province’s infrastructure portfolio ensuring long-term benefits, while settling its e-toll debt without impacting other areas of service delivery, it said.
Furthermore, the GPG has already begun repurposing e-toll gantries for law enforcement duties, with the revenue derived from traffic fines potentially providing another avenue to repay its dues.
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