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Cabinet says final decision on e-tolls has not been made

Despite transport minister stating that the system cannot be scrapped.
Transport Minister Fikile Mbalula's latest comments have caused some confusion. Image: GCIS

A final decision on the future of e-tolls on the Gauteng Freeway Improvement Project (GFIP) has not been taken by the government.

This is despite reported comments by Transport Minister Fikile Mbalula late last week that the e-toll system cannot be scrapped.

Mbalula’s comments have caused some confusion, with some people interpreting his comments as being the government’s long-awaited final decision on the future of the controversial scheme.

Read:

However, cabinet spokesperson Phumla Williams told Moneyweb on Tuesday that a final decision on the future of e-tolls on GFIP has definitely not been made yet.

Williams said statements issued after cabinet meetings will list all cabinet decisions, but sometimes state that the relevant minister will hold a separate briefing – “especially if it’s a weighty decision”.

The latest SA National Road Agency (Sanral) annual report released last week revealed that revenue from the GFIP decreased by 31.5% to R207 million in the year to end-March 2021 from R452 million in the prior year.

Sanral said this project is the only Sanral toll route that receives a government grant to offset the discounts on tariffs instituted in response to public opposition to tolling on Gauteng freeways.

“In 2020/21, this grant amounted to R2 721.8 million, which includes R2 300m that the Minister of Transport, as Sanral’s sole shareholder, approved as a transfer from non-toll to toll operations to reduce the expected shortfall in collection of revenue,” it said.

Read: Sanral’s total liabilities top R140bn

Sanral added that government has indicated and shown its preparedness to provide financial support to the GFIP e-tolls project while a solution is awaited.

It said the agency has therefore included a budgetary transfer of R3.25 billion, excluding Vat, per annum over the medium term expenditure framework ending in the 2022-23 financial year to cover the shortfall on e-tolls.

“Even though final approval of this additional transfer from Parliament is still awaited, based on past experience, management concludes that it is inevitable that it will be granted to ensure that the entity does not default.

“The material uncertainties on the future of GFIP as a going concern on its own, are expected to be mitigated through direct government support and feasible sources of financing,” the agency noted.

Read: Cracks appear in government’s e-toll user-pay principle

It said gross toll debtors amounted to just over R9.7 billion, which was reduced by an accumulated expected lifetime loss allowance of around R9.6 billion.

Sanral said although the debt is not written off, the impairment reflects the expected losses and is assessed annually at the end of each reporting period.

It added that the inability to resolve the GFIP e-tolls issue continues to place significant pressure on Sanral’s balance sheet, compromising its ability to source funding and exacerbating uncertainty regarding the future of road funding.

Sanral CEO Skhumbuzo Macozoma last month told a Consulting Engineers South Africa (Cesa) Infrastructure Indaba that the impasse over the e-toll scheme and uncertainty about the financial viability of Sanral had resulted in the Sanral losing the opportunity to obtain R14 billion in funding for projects.

Macozoma called on the government to “bite the bullet” and take a decision on the e-toll scheme on the GFIP.

Read: Sanral loses R14bn in project funding opportunities

“There are no easy answers. All the options we have presented to government have very significant financial implications and I think we must just make a decision.

“Bite the bullet and do so. There is not going to be an answer that is not going to affect South Africans in the pocket, including cancellation,” he said.

Gauteng MEC for Public and Roads Infrastructure Jacob Mamabolo, in an interview with eNCA on Saturday, reiterated the official position of the Gauteng provincial government on e-tolls on the GFIP.

“We have clearly said that e-tolls must be scrapped. We still stand by that position. Nothing has changed in our position. We are firm on that.

“Why has it not been scrapped? This is a matter within the purview of national government,” he said.

Read: E-tolls have not officially been scrapped

Organisation Undoing Tax Abuse (Outa) CEO Wayne Duvenage on Tuesday questioned why the government is sending “mixed messages” on the future of e-tolls and not taking a decision on the scheme.

Duvenage referred to all the discussions and promises in the past about a decision on e-tolls, that a decision would be announced by the end of March 2021, that it is imminent and yet month after month, the issue is not on the agenda of Cabinet.

“But Cabinet is still meeting on this thorny, long overdue issue. It just lowers the trust in government,” he said.

Duvenage stressed there are not any additional costs to Sanral if the e-toll scheme is scrapped because the e-toll management contract has expired, adding “in fact, there might even be a saving”.

Outa has estimated that only about 15% of motorists using the GFIP pay their e-toll accounts.

Automobile Association spokesperson Layton Beard said the lack of clarity on the future of e-tolls is causing fewer and fewer motorists to pay their e-toll accounts.

Beard said there is funding available through other channels and alternatives through which the GFIP roads can be maintained.

He believed e-toll compliance was low because people have taken a principle view that they are not going to pay their e-tolls because they already pay taxes, already pay taxes on fuel and money should be available to maintain and improve the road infrastructure.

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E-tolls aren’t going anywhere. Whenever there is a local or government election, the politicians promise to scrap E-tolls to attract votes.

E-tolls are a pro-poor tax. Taxi’s which are used by the poor are exempt. Therefore, the roads are subsidized by the car owners.

Sanral must simply prevent car owners, with outstanding debts from renewing their vehicle licences. Serious offenders should be blacklisted.

This will end the impasse once and for all.

Toll booths should be turned into paypoints to distribute a universal basic income. Every time you go through a toll, your bank account will be credited.

Fits perfectly with free electricity, water, education, land and housing.

In this way South Africa will be transformed into a paradise

I’m still paying but hardly use gantry roads, just want to keep my e-tag going. Good idea though to get all the wrecks off the road so that the user pay principle is respected. That means taxis should also pay since they pay no other taxes from their cash business.

Wonderful idea Navigator — Can I submit a tender already???

But you need a free car to do this ??

You obviously assuming people will care about driving around without a licence. Government knows if they do this, people just going to not pay licence fees either. The government is so corrupt they have lost all authority they ever had.

We will just end up a licenceless country, cars and people.

EFF commissar, this is not a communist site.
Please take your hogwash elsewhere.

No no no EFF!

Private car ownership is elitist. Cars should not have keys so that anybody can use any car anytime. Then we don’t want tolls.

Taxi may well be considered to be “pro poor” but the main reason why taxis are excluded from e-tolls is that the government is intimidated by the taxi associations. The threat of violence and chaos, supported by taxi hit men, results in the government putting proverbial “tail between legs” and running away. Much easier and safer to coerce the ordinary motorist to pay.

Who cares what they say or do — We do NOT pay !!!

When everyone pays for water, electricity, sewer, rates, refuse removal etx, then we can implement user pay systems.

Therefore the Govt has to deal with the culture of non-payment before trying to implement user pays.

But, a perfecty good system exists for collection and on user pays in the form of paying for fuel.

Most people don’t know that the cities are cross-subsidizing rural areas for fuel and the employment of attendees through the retail price maintenance system (by law) anyway.

The ANC is the problem, not just e-Tolls.

Is there any point in highlighting again and again just how useless the idle fatcats in the ANC are!!!!

The reason they haven’t made this decision despite 2 years of trying is because their authoritarian politburo-style leanings make it impossible for them to bow to the people who elected them. It would scald their souls to admit they got rolled over by the middle class.

Or they’re just complete muppets.

Or, whoever paid the bribes wants their pound of flesh and they have leverage over the ANC, apart from the cross default risk.

Not sure Rob, Usually when the ANC makes a decision (or fails to make one) there is loot involved. Someone postulated that scrapping it would cut off a nice stream of income from SANRAL to the etoll “contractors” who still get paid, regardless of whether the travelling public pay or not. Bets are that these “contractors” are all ANC elites and their fellow travellers.

Decisions, decisions, such a headache! It must be time for their nappy change and a lie down.
Once again the cabinet cannot see the wood for the trees.
I suggest that they continue to encourage the electorate to vote for the axe.

The moment this famous babbler of Twitter fame became Minister of Transport, the writing was on the wall: e-tolls will be enforced, by hook or, preferably, by crook. One could argue the technically correct implementation of the system, with advertisements calling for public comment being placed in obscure publications. At the end of the day, it was never about a service to the South African motorist and always about enriching a few foreigners (although I think there may have been local beneficiaries as is our wont). Morally and ethically, the system is simply wrong – and right there you have the reason why it will not be scrapped.

Why would they need to scrap it? Just keep it running, bail it out when necessary, and just run up the debt. Its not like taxpayers have any power or alternative here.

Sanral might not be collecting enough from Gfip but they have found another way to get more money. They have increased other toll fees by more than 10% and AA and Outa are silent about this. Is it because these freeways have boom gates and motorists have to pay?
Eskom also hit us with some ridiculous increase even though the fake inflation is less than 5%.

I think the final decision has already been made – by the people who are not paying. Government just refuse to listen!

End of comments.

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