The government has back-tracked on comments made by finance minister Tito Mboweni on the future of e-tolls and stressed a decision on the controversial system will only be taken by Cabinet in the next two weeks.
Transport Minister Fikile Mbalula confirmed this late on Thursday that government had decided to retain the the user pay principle. This follows Mboweni’s disclosure in his medium term budget policy statement (MTBPS) speech on Wednesday, in reference to the Gauteng Freeway Improvement Project (GFIP).
He said while there would be a further dispensation and value-added services, compliance would also be strengthened.
However, Mbalula said he wanted to state on record that Cabinet has not yet arrived at a decision on the future of the GFIP.
He said the proposals for GFIP, in particular the preferred reconfigured approach, were tabled with Cabinet on Wednesday.
Cabinet deliberated on these proposals and decided the task team must go back, do some more work and report back in two weeks when Cabinet reconvened, he added.
“It is only then that we will then debate and present to South Africa what would have been a decision of Cabinet on the future of GFIP.”
Mbalula said the principle of user pay as articulated by Mboweni in the MTBPS must not be blown out of proportion.
He stressed it was a principle that was implemented globally and the South African government “is no exception to that”.
Mbalula also stressed that the task team was not working on a scheme to implement e-tolls in terms of the current scheme.
“We are talking about a reconfigured approach – whether that reconfigured approach entails non-payment. That is what we are actually looking [at] and what are the implications for the country,” he said.
Mbalula said more than seven proposals on the e-toll scheme are being considered.
He said the first and most popular option is one that looks into the cancellation of the e-toll scheme and the withdrawal of declaration for GFIP phase one road work.
Mbalula said this option involves government taking full responsibility for the debt servicing obligation of the scheme but questioned where government must the find money for it.
The other options are a partial shadow toll, which is a scheme where government’s subsidy contribution is less than 100%; selling the GFIP to a private concessionaire; the introduction of a public transport fund that would prioritise public transport; a hybrid funding model comprising a combination of taxes such as a fuel levy and licences to subsidise toll fees; a further dispensation and physical toll plaza installations; and to implement the e-toll scheme as it was intended.
Mbalula said in all the engagements with the task team, nobody had told them not to use the user pay principle.
“The user pay principle is what underpins any service that government renders to society.
“They agree that we need to entrench the principle of user pay, because if we don’t it means we will not pay for everything around us. The question of a Father Christmas bucket has actually not worked since 1994,” he said.
Mbalula said the total unpaid toll fees would peak at R67 billion and require an annual allocation of R2 billion from government to service the 30-year repayment period for the outstanding debt, after government had also written off all outstanding toll debts.
He said the preferred option would take into consideration the interests of society and what is in the best interests of the country.
It would also consider the state of the economy in relation to the commitments made in the bond market and the capacity for government to borrow and to continue to borrow to upgrade the country’s roads, because of the skyrocketing debt as a result of non payment.
Wayne Duvenage, chief executive of the Organisation Undoing Tax Abuse (Outa), said after the MTBPS it’s worried by government’s determination to cling to the myth that the e-toll scheme is an efficient user-pay financial solution to settle the freeway upgrade bonds – when it is a failed user-pay scheme, it is not efficient, and it is fraught with corruption.
Duvenage said Outa is uncertain how the government will enforce greater compliance when there are still outstanding court cases related to the implementation of e-tolls, adding Outa has no intention of giving in on the e-tolls issue.
“The test case that has been developed over the past two years has been abandoned, or placed on hold for the past eight months by Sanral. The court case is in the way and it has to happen.
“I don’t know what has to happen to get it into the brain of government that you cannot run a country against the will of the people.”