E-tolls fail to feature in the budget review

But government stresses the importance of the ‘user-pay policy’ to public entities.
And toll tariffs on SA’s national roads go up on March 1. Image: Moneyweb

The controversial e-toll system on the Gauteng Freeway Improvement Project (GFIP) failed to get any direct mention in the 2021 Budget Review although there were general references to the “user-pay” policy.

The review said the financial positions of public entities and local government remain weak as a consequence of poor financial management, adding that medium-term debt redemptions of state-owned companies total R182.8 billion.

“Without rapid improvements in financial management and the resolution of longstanding policy disputes – including the user-pay principle – they will continue to put pressure on public finances,” it said.

However, an annexure to the Budget Review stressed, without making any reference to e-tolls on the GFIP, that until the user-pay policy for roads is fully implemented, the SA National Roads Agency (Sanral) will continue to have limited access to capital markets to fund its toll roads.

It said shifts in transfers to Sanral in previous years ensured that it met its financial obligations but compromised the quality of the non-toll network.

Decision long-delayed

The Democratic Alliance (DA) in Gauteng last week welcomed Transport Minister Fikile Mbalula’s indication that national government will provide certainty about the future of e-tolls on the GFIP by the end of March but called on Mbalula to stick to his promise this time.

This is a reference to Mbalula’s appointment by President Cyril Ramaphosa as head of a task team to report to the president on the options on the table with regard to e-tolls by the end of August 2019.

Mbalula subsequently said his stated aim was to achieve a “win-win” solution for government and society and a decision would be announced by cabinet.

A cabinet decision on the future of e-tolls was initially expected to be made by the end of 2019 but was postponed until the first cabinet meeting in 2020. An announcement on the future of e-tolls has still not been made.

Opposition

DA Gauteng Shadow MEC for Roads and Transport Fred Nel said last week that in light of recent announcements that all toll fees will soon increase, despite the desperate state of the country’s economy and subsequent damage to many livelihoods during the lockdown, it is even more important to get rid of e-tolls as soon as possible.

“E-tolls must go and any other announcement by the minister cannot be acceptable.

“The people of Gauteng must no longer be burdened by this nonsensical system,” he said.

Mbalula announced this week that toll tariffs on South Africa’s national roads will be adjusted by an average of 3.39% effective from March 1.

National toll roads

An annexure to the 2021 Budget Review provided some insight to the impact of the Covid-19 lockdown on Sanral’s three public private partnership (PPP) toll road concessions: the N3 toll road, the N4 East toll road and the N4 West toll road.

It said the effect of lower traffic volumes and revenue due to lockdown restrictions varies but stressed that all the PPP agreements specify that any loss emanating from traffic volumes is borne by the private operator.

The review said revenue collection on the N3 toll road between the Cedara interchange in KwaZulu-Natal and the Heidelberg South interchange in Gauteng has been affected by restrictions on interprovincial travel and the hospitality industry.

However, it said these revenue losses have not yet been quantified and the private operator will claim these losses from its insurer.

The review said traffic volumes at the N4 East toll plazas between Pretoria and Maputo dropped to 18% of pre-Covid-19 levels during the strict lockdown imposed in March 2020 compared to the same period in 2019.

However, it said total traffic volumes showed a gradual resumption of activity and were at about 80% between March 2020 and January 2021 compared to the corresponding months in the previous year.

Border delays

The review said additional Covid-19 regulations imposed at borders caused delays and a reduction in traffic movement between South Africa and Mozambique during 2020, and the December 2020 closure of border posts is significantly affecting toll revenue collections.

“Between August 2019 and July 2020, the private operator estimated a revenue loss of R298.7 million,” it said.

Revenue for the N4 West Bakwena toll road between Pretoria and Rustenburg is estimated to have dropped to 20% of pre-Covid-19 estimates in March and April 2020 compared to the same period in 2019.

“Between March and September 2020, revenue losses amounted to R371.3 million. The private operator is pursuing this claim from its insurer,” the review said.

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“But government stresses the importance of the ‘user-pay policy’ ”

Great. Now apply this to to the countless non paying electricity consumers.

Blah, Blah Blah as per usual.

Please stop with the common sense already. These “on-the-job trainee’s in gubment are trying.

Remember this article??https://www.moneyweb.co.za/news/south-africa/aarto-to-hit-e-toll-defaulters/
It says they want to “impose a R 500 fine on individual e-toll defaulters EVERY TIME THEY PASS UNDER A GANTRY.” I have had an e-tag since inception and when I wrote my article years ago, it ended with—-When the government wants your money THEY WILL GET IT! Buy the stupid tag.

Sorry to hear that you’ve fallen for this scam.

If users must pay then collect municipal debt for services.

If user-pay is a policy of government, then implement it evenhandedly. No more tax support for SAA which uses taxpayer money to compete with the private sector. People who watch SABC programming can pay for that. Implement user-pay fully throughout the SOEs, thereby also making them more efficient. Why focus only on roads and SANRAL in terms of user-pay?

Secondly, be clear what user-pay means in the case of SANRAL. Tolls are pooled and SANRAL uses the revenue generated in one area to subsidize others. The GFIP was meant to subsidize in part the Wild Coast toll road. This is not how the public understand user-pay.

I agree with your comment on the pooling of toll money to subsidizing other regions. However this negates the reason given against a fuel Levey i.e. the rest of the country would be subsidizing Gauteng. Your subsidizing comment is supported by OUTAS projections that about 25% of SANRALS income would come from the 2% of their toll network i.e the e-tolled Gauteng freeways.

Three points:

1. The government’s own review of State-Owned Enterprises concluded that there should be less reliance on user-pay for social infrastructure like roads.

2. Toll roads are history. Repeated court cases have shown SANRAL’s prevailing modus operandi to get these roads approved is to flout the law and the constitution’s consultation requirements. One wonders why. Could it be that they know if they actually consulted in good faith, the public would tell them to get knotted, and if they went ahead anyway over the public’s objections, they would die on their feet in court like they did with the N4, HMKL N1, and Winelands project?

3. The Gautrain, that white elephant for the middle class which has yet to hit any of its much-vaunted ridership targets, is getting an extra R400m pa subsidy, now totalling nearly half of the Gauteng transport budget. Whither ‘user pay’? Good luck if you live in Soweto and have to use deathtrap taxis – no subsidy or credible public transport for you.

Infrastructure is about the only thing that communist regimes are / were any good at, so it’s baffling that the ANC caucus’s communist wing is so content to regard it as a profit centre instead of an economic enabler.

User Pays *Fair* Share = Good policy

eTolls is a money grab.
eTolls collection very inefficient vs levy.
eTolls sends most of it’s revenue to Austria.

eTolls is 189km or 1% of SANRAL roads under management.
SANRAL wants to collect 34% of SANRAL revenue to come this 1%.
189km would generate 2x the 2394+189km of toll roads.

See OUTA video for explanation of the 34% scam.
https://youtu.be/BIk1P06_GkA

What about a “guavumunt-delivers” policy? Also, where is all the money for road maintenance collected at the fuel pump going to? This current regime is a curse on any country.

I definitely support the user pays principal but it will never be implemented properly because it would bankrupt government. In SA the non users (tax payers) pay and the non payers use.

End of comments.

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