The Organisation Undoing Tax Abuse (Outa) has called on the government to provide more clarity on the current e-toll debacle.
The Gauteng provincial and the national governing parties recently agreed to contribute 30% and 70%, respectively, to service the National Roads Agency’s (Sanral) debt and interest obligations, which include the e-toll scheme, with the provincial government’s slice amounting to around R12 billion.
Following this news, Gauteng premier Panyaza Lesufi said the province is considering converting the e-toll infrastructure for crime fighting and confirmed the tolling project would be scrapped on 31 December 2022.
The new year came with e-tolls still in operation, the reason for this being that the Gauteng government had not yet reached an agreement with the National Treasury on how the debt repayments and scrapping would take place.
In a recent interview on 702, Lesufi said the discontinuation of the province’s e-tolls needed to follow legislative procedures that required regulation changes through the publishing of a gazette, but that there had been differences between the national and provincial governments over the details.
Additionally, he revealed that the government will repay e-toll users who have been compliant in paying their accounts, which constituted approximately 17% of road users in Gauteng.
However, Outa said there still isn’t enough transparency on the decisions made by the two governing entities and that the main issues need further clarity.
Gauteng’s debt obligations
The Gauteng provincial government is now obligated to pay a decent portion of debt that national authorities including the Treasury, Department of Transport, and Sanral entered into in 2008 when the tolling scheme was first approved.
“The Gauteng freeway infrastructure upgrade took place on national roads managed by Sanral, reporting to the national Department of Transport, and it was the national Ministry of Finance which approved the government guarantees to back the bonds taken up by Sanral, of which only R21 billion pertained to the Gauteng Freeway Improvement Project (GFIP),” said Wayne Duvenage, Outa CEO.
“Even if Gauteng has been convinced to contribute toward 30% of the bonds, it should only be to cover 30% of the R21 billion borrowed for the GFIP, ie R6.3 billion, not of the R43 billion Treasury says the GFIP debt is now.”
Moreover, between 2011/12 and in March 2022, National Treasury bailed out Sanral to the tune of R22.4 billion specifically for the GFIP debt, which is well above the project’s capital cost.
“We want clarity on what exactly the province is expected to contribute 30% toward, and how the figure is calculated,” said Duvenage.
“On top of this, the Gauteng government should be asking why Sanral paid the excessive cost of R17.9 billion for the GFIP upgrade (before the e-toll gantries added another R3 billion infrastructure costs).”
According to Outa’s estimates, the GFIP project should have cost no more than R9 billion and corruption caused it to balloon to R17.9 billion by the time the project was completed in 2011.
Increased revenue collection
Gauteng premier Lesufi announced earlier in January that the provincial government would consult with motorists on finding the best way to collect revenue after the scrapping of e-tolls to service its debt obligations, as well as that motorists who duly paid their e-toll accounts will be refunded.
Thus far, proposed methods for increased revenue generation include raising licence fees, manually tolling vehicles that enter the province, or a 3-cent-per-litre provincial increase in fuel prices.
“While we are pleased that the Premier has indicated that he intends to consult widely with the people of Gauteng on how best to extract funds from Gauteng residents – presumably to cover Gauteng’s 30% commitment – we fail to see how this will be raised in the form of any additional provincial taxes without making Gauteng a more expensive province to live and do business in,” said Duvenage.
Additionally, Outa notes that while it’s a welcome development that e-toll-compliant motorists will be refunded, working out to a total repayment of R6.9 billion, the organisation remains concerned that these commitments are being made by the Gauteng premier rather than Sanral, the state-owned enterprise that collected the fees.
“This matter requires a comprehensive explanation from Sanral on what refunds will be made and how,” said Duvenage.
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