Already fed up with the commute between Joburg and Pretoria just three years after the official launch of e-tolls?
Well, things are going to get a whole lot worse unless the SA National Roads Agency (Sanral) solves its funding problem caused by the widespread e-tolls boycott, the agency says.
It took just 30 minutes to drive from Pretoria to Joburg during peak traffic when the Gauteng Freeway Improvement Project (GFIP) was completed in 2011, though e-tolling was only launched in December 2013.
“Based on the growth in the number of cars on the route, we expect the commute from Pretoria to Joburg to take two hours during peak hours,” says Alex van Niekerk, Sanral’s project manager for GFIP.
The same commute currently takes about an hour in busy traffic.
The Gauteng car pool has grown by 1 million vehicles to 4.2 million since 2009. The car pool for the whole of SA has grown to 10.7 million from 4.9 million in 1994, and is expected to reach 16 million in 2030.
A two-hour commute – if this is correct – would represent a huge drain on the economy in terms of lost production and extra fuel consumption.
“My feeling is that when Sanral makes statements like this, it is an indirect threat or sanction against the people, which basically says, accept e-tolls or live with congestion,” says Wayne Duvenage, chairman of Organisation Undoing Tax Abuse (Outa). “They refuse to accept the alternatives and hide behind government decisions, when, in fact, they advised government on the defunct e-toll scheme. They cannot now sit back and watch the congestion grow. They have to act and find solutions to their impasse.”
The e-tolls boycott has hit Sanral’s funding for planned route developments which would alleviate congestion on the Joburg-Pretoria highway. These routes include the PW9 as a parallel route to the Ben Schoeman highway; a ring road around Pretoria to ease traffic congestion in the east of the city and provide better access to the western suburbs; a route connecting Soweto to Midrand; and the planned PWV14 route which is intended to route traffic away from the often-gridlocked Gilooly’s interchange to the east of Johannesburg.
Van Niekerk says these projects have been delayed by the e-tolls boycott, which has hit Sanral’s revenue collection. According to figures reported to parliament, 2.9 million Gauteng freeway users have outstanding debts to Sanral. The total outstanding debt is R7.2 billion according to the 2016 annual report.
Then there is the practical difficulty of collecting outstanding debts of close to R7 billion, which Gauteng motorists could not sustain without serious damage to the provincial economy. Sanral has issued more than 6 000 summonses in an effort to collect outstanding debts, and van Niekerk says further summons will be issued. As previously reported in Moneyweb, Sanral faces a prescription problem commencing in December this year, as in terms of the Prescription Act it will have difficulty claiming debts older than three years. It might attempt to criminalise defaulters through the Administrative Adjudication of Road Traffic Offences (Aarto) Act, but this will almost certainly be challenged in the Constitutional Court.
Outa has challenged Sanral’s refusal to write off large parts of its overdue debt, some of which is nearly three years old and therefore well past the generally accepted accounting standards for debt write-off (which should be expensed through the income statement). Instead, Sanral is counting this debt as an asset on its balance sheet, which was signed off by the Auditor-General.
Sanral offered motorists a 60% discount on outstanding bills, but the response to this was miserable. Outa reckons collections are running at between R50 million and R70 million a month, which is a fraction of where they need to be.
In practical terms, e-toll boycotts have shifted Sanral’s funding burden back to government, which provides guarantees allowing the state-owned company to raise borrowings on the bond market.
Given the mess the e-tolls boycott has generated, would it not have been better to impose a 9c a litre fuel levy as Outa suggested? Had Sanral done this, the Gauteng Freeways would theoretically have been paid off by now.
Van Niekerk says Sanral is bound by government’s commitment to the user-pay principle (ie. tolling) and there are costs associated with ring-fencing a portion of the fuel levy for a particular highway project. “Given all the routes that have to be built around the country, we would end up with a multitude of ring-fenced portions of the fuel levy which would render it uncontrollable.”
National Treasury is in any event against ring-fencing, while a 9c a litre fuel levy would not provide for future maintenance, says van Niekerk. Additionally, motorists elsewhere in the country may object to paying for Gauteng roads they do not frequently use.
Duvenage replies: “Gauteng generates close of 40% of the GDP of SA, and is paying for roads elsewhere in the country through its tax contributions. The argument that a fuel levy would prejudice motorists elsewhere does not hold water.”
Duvenage says there is almost no chance of Sanral recovering its outstanding debts, as there are insurmountable legal and practical aspects to the recovery of its debt. A high court legal test case between Outa and Sanral is looming, but the matter is unlikely to be resolved any time soon.
Van Niekerk says similar tolling programmes have succeeded in other developing countries, and cites Chile as an example, where 93% of motorists pay their bills.
Sanral’s ‘misleading’ financial statements
In a statement released on Wednesday, Outa says Sanral has misled the Standing Committee on Public Accounts (Scopa) by failing to write off overdue debt, which is now approaching R9 billion.
In response to questions put to it by Scopa over its accounting for outstanding debt, Sanral’s chief financial officer Inge Mulder said the law does not allow it to write off such debts, and the organisation would endeavour to collect this money. Mulder added that Sanral’s reporting was within the International Finance Resorting Standards (IFRS), when reflecting the substantial re-valuation of their road assets in 2010.
Outa says it is disingenuous for Sanral to announce IFRS as their financial reporting guide on asset valuations on the one hand, and then to disregard those same standards when it comes to reflecting their unrecoverable debt from the outstanding e-toll situation on the other hand.
“When questioned on what Sanral believed was the likelihood of collecting this debt by Mr Brauteseth, Sanral’s management failed to answer the question and instead, Sanral’s chairperson, Mr Roshan, proceeded to indicate that their e-toll income levels had achieved a slight rise in recent months,” said Outa in a statement.
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