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Sanral throws in towel over e-toll debts older than 3 years

And writes off R3.6 billion in e-toll debt, though will pursue defaulters through the courts.

The South African National Roads Agency (Sanral) has thrown in the towel over e-toll debts older than three years and written off R3.6 billion in the 2017 financial year relating to this debt. However, it will continue in its attempts to recover unpaid e-tolls by pursuing defaulters in the courts. 

It also says the Sanral Act allows it to institute criminal prosecutions against defaulters, though attorneys contacted by Moneyweb believe a criminal conviction will be a hard sell in any court, not to mention a PR nightmare for Sanral.

It was exactly a year ago that Moneyweb first raised questions over the recoverability of these old debts in terms of the Prescription Act, which makes it difficult for creditors to recover certain debts older than three years. Last year, Sanral counted unpaid e-tolls as revenue even though there was little chance of ever seeing this money due to the social protest movement led by Organisation Undoing Tax Abuse (Outa). The write-off of this older debt was signed off by the Auditor-General.

So long as Sanral recognises that any debt over three years’ old should not be counted, it will be under pressure to find some resolution through the courts on the recoverability of unpaid e-tolls. If this drags on another year, which seems likely, it will have to write off another chunk of unpaid e-tolls next year.

Outa says the most telling sign of Sanral’s financial woes is the increased loss posted, at just under R5 billion, which was substantively up from the loss of R1.2 billion posted last year, the bulk of which (R4.58 billion) arising from its toll operations.

“However, it was the change of heart in Sanral’s treatment of its outstanding e-toll debt when compared to last year, that one notices the processing of impairment losses of R3.6 billion [which] relates to e-toll debts that were written off,” says Wayne Duvenage, Outa’s chairperson. “Last year, virtually no outstanding debt was written off, as Sanral had pinned its hopes on the 60% discount dispensation gaining traction during the following financial period. This year, the massive R3.6 billion is a significant acknowledgement that e-toll debt is largely unable to be collected, as this equated to 50% of the trade receivables for the first 15 months [of] operations and is well above the prescribed debt.”

Another feature of the results is the meteoric rise in debt to R48 billion from R6 billion a decade ago. Borrowings increased R10 billion in the last two years, in part to cover an increase of about 1 400kms in new roads under management over the period. The total road network covers 24 637 kms, of which 87% is non-tolled. The rest are tolled roads.

RMB credit analyst Elena Ilkova, says the main reason for the rise in debt was that the Gauteng Freeway Improvement Project (GFIP) was accelerated so that Gauteng’s improved roads were ready for the 2010 FIFA Soccer Word Cup. “If it was not for that rush, upgrades would have been done more slowly as cash became available. Had e-tolling started immediately after the World Cup, most of the debt would have been repaid by now, but the start of tolling was delayed by almost three years.”

The cash position deteriorated by nearly R3 billion over the year, with a total cash haul of R6.6 billion at the end of the year. Total expenses for the year jumped from R10.9 billion in 2016 to R17.3 billion, after writing off R3.7 billion for bad debts. Based on this level of expenses, Sanral has sufficient cash to carry it for a few months before it needs to raise additional borrowings. Last week the Auditor-General took aim at entities falling under the Department of Transport, saying they were likely to miss targets established in terms of their strategic plans.

Finance minister Malusi Gigaba last week announced that Sanral’s guarantee has been expanded to nearly R39 billion from R31 billion, which will allow it to continue with its borrowing programme in order to meet its commitments.

The company collected R1.85 billion from e-tolls over the year, which is a fraction of what was anticipated when the project was launched in 2013. Outa estimates that close to 80% of Gauteng freeway users are refusing to pay e-tolls. The toll operating loss for the year to March 2017 was R4.58 billion.

Sanral’s recently released 2017 annual report shows toll revenue up 6% to R4.9 billion. Government chipped in with a grant of R8.6 billion (up from R6.5 billion for the previous year) to give total revenue for the year of R13.9 billion.

Roshan Morar, Sanral’s chairman, says the clean audit report from the Auditor-General confirms the quality of corporate governance and financial management at the company. “Fruitless, wasteful and irregular expenditure has gone down in the past year to R424.9 million from R1.1 billion the previous year,” says Morar.

“Where required, and as part of consequence management, disciplinary action was taken against responsible employees, and in two instances against service providers, and it was made clear that any deviations from good corporate governance will not be tolerated. Understanding that some of the fruitless, wasteful and irregular expenditure emanates from events that precede the financial year under review, we have given management the instruction to eliminate these by the next financial year.”

On targets relating to corporate performance, the agency achieved 32 out of its 37 targets, which translates into 86% achievement.

In June transport minister Joe Maswanganyi said government would explore alternatives to e-tolls, and Sanral – while reaffirming its commitment to e-tolls – has indicated that a fuel levy is under consideration, though it has problems of its own. It is seen as a regressive tax that impacts the poor most.

Another concern raised by Outa is the R430 million of irregular expenditure, which Sanral claims an achievement as it is less than half the previous year’s figure. “While the trend of curbing irregular expenditure may be moving in the right direction, the value is still unacceptably high,” says Duvenage.   

Outa says the current legal actions taken against e-toll defaulters is a further waste of taxpayer money. Outa and Sanral’s legal teams have been working to bring the first case to court for well over a year now.

Duvenage says he is pleased that Maswanganyi acknowledged the challenges Sanral has had with tolling, especially the GFIP. He plans to hold discussions with all provinces to find solutions and to take the proposals to government. Outa will seek to engage with the authorities on making a decision to eventually can the failed scheme, once and for all.

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And those who have followed the law get no special treatment or even a reduction in fees. AGAIN not following the law pays!!!!!!!!!! This WAS such a beautiful country. I keep hearing this flushing sound??

I hear that flushing sound but there is so much down there the water is rising, wow look I see Zuma, Atul and a few others swirling around the edge of the bowl……….

Since the e-tolling system was conceived and implemented in a manner that was completely unlawful, there was no “law” to “follow”.

If SANRAL was that confident the system was lawful, they wouldn’t be trying sneak recoveries via civil proceedings, but go straight for a criminal case as S27 of the SANRAL Act clearly empowers them to do. So why, in four years, haven’t they?

They know the system is unlawful as do the other 70% who refuse to fund lawless behaviour by a rogue state entity. If you didn’t know that…well…Kapsch TrafficCom thanks you for your donation and encourages you to keep giving generously.

Here’s just part of the problem, I’ve emailed Sanral 17 x requesting a breakdown of etoll gates I’m being charged for, with absolutely no response, they expect payment without details. So in another 3-years there’s be more write-off. Even called the their so-called call centre and still no information is forthcoming. Well then there’s no payment!

Suggest you persevere until you get the pictures. You should be able to access them onlibe on the VPC centre.

An anecdote: I’m responsible for VPC payments for a relative’s small saloon. The small saloon does not have an e-tag and I recently received a Violation Processing Centre (what a name!) SMS for a few Rand (a single gantry charge). I have previously paid VPC charges for this car so was able to check photograph which turned out to be that of a mini-bus taxi.

I understand mistakes can happen with license plate reading technology but it seems this VPC charge was for a single gantry when logically there should have been charges for preceding and succeeding gantries for any vehicle allegedly passing through the middle gantry.

I would have thought a basic check eToll systems have in place is to throw out as an exception for further in-house scrutiny any charge on a middle ‘orphan’ gantry. It makes one wonder how many such avoidable errors creep into the etoll charges.

The problem isn’t with the licence plate recognition technology, which is highly reliable.

It’s that an estimated 15% of e-Natis data is corrupt, fraudulent or just plain wrong. SANRAL was warned about this in 2007, but ignored it, thinking that the middle class would just roll over and play dead as usual.

Pity.

Good, now the next step is to stop our financial support for Tom Moyane and his gang of thugs at SARS. Let Treasury sort them out with guarantees, which they seem to have an endless supply of.

SARS belongs to the Zuptas, so they should fund them. The people who voted for this criminal government should now be satisfied with “guarantees from treasury” as payment for social grants. Go and see how much groceries you can buy with a government guarantee.

Government Employees in Zim are paid with government guarantees, they call it “bond notes”. It is a promise to pay some day in the future. Nobody believes it. The National Treasury of South Africa is heading towards this situation with the inertia of a runaway freight train.

The ANC government will run out of money long before it runs out of bulsh*t ideas.

I have just paid my 59 cent toll demand. Agree I should break the law in future. The same is happening with rates and taxes, offers of interest write off and a 50% discount for defaulters. What about those that paid in full from the start. Discounts, subsidies????
This method just encourages us to break the law. Watch your cash flow when we all decide to wait for either a write off or a massive discount.

The payment rate for e-tolls is 29%. “We all decide” happened half a decade ago.

To add insult to injury, or rather to add fatal injury of road users to operational and financial incompetence of SANRAL, in my opinion as a layman the cement barriers on the centre islands look like dam walls. They certainly seem to behave like damn walls in any downpour creating dangerous dams of water on one side of the barrier while the water drains gently off the other side. I don’t buy the SANRAL excuses that the the daming of water causing road deaths is the result of extreme storms (out of their control) or poor maintence of the drains (in their control). I think it’s a design flaw. Would love an independent storm water engineer’s view.

Would also love an independent traffic engineer’s view of whether the impressive levered single and double lane flyovers at Elands and Gillooly’s interchanges are effective designs, a vanity project or project designed purely to generate commissions.

Sadly OUTA is celebrating moving from a tax that eases traffic congestion to a tax (fuel levy) that is known for its murkiness and misuse.

We need some good economists to step up and explain that to them.

On SANRAL, we should hold the management to tell us what the irregular expenditure is, prosecute if a crime was committed, and bring it to zero in the future.

At least with the fuel levy no private citizen gets to be threatened by summonses or criminal court cases, they will collect it from fuel purchases and should there be any disputes it will be among themselves as they always have. Cut us out of this debt crap. We not refusing to be robbed they do it anyway but stop legally harassing us.

The e-toll tax is really a general revenue collection exercise. The whole point of the e-toll system was to get urban road users to fund the rest of the toll network, such as the Wild Coast toll road, which would not be able to pay for itself. E-tolls have massive collection costs, which are sent overseas. Every day you watch all those vehicles on the toll roads – just remember the fuel levies they are paying are not spent on those roads. SANRAL are rent seekers.

yes Arthur you are correct the fuel levies collected are not fully spent on the roads. Hence i dislike this form of tax.

So your farmer driving his tractor on the farm is being made to pay a fuel levy even if he doesn’t use a national road.

On the etoll fees, i think it is better as it changes behavior as there are varied tariffs for different times. So for example your logistics company is incentivized to send his trucks during off peak periods to take advantage of lower tariffs. This should ease congestion during peak times saving the economy billions in time and money for its citizens. I also prefer this method to the stop and pay toll booths which create more congestion and waste more time.

Kapsch and its SAAB partner (remember the 26 mostly mothballed fighter jets we bought as part of the corrupt arms deal?) financed the Gauteng highway upgrade project ahead of the 2010 world cup, which is where most of paid tolls are going. Whether they want to repeat the exercise on the wild coast remains to be seen, considering Sanral is behind on debt payments and junk status isn’t helping…

We can definitely see a fuel levy hike when Zugaba and co. strongarm Kganyago into dropping the repo rate and the economy charges ahead blindly into a tarpit of high inflation and stock market collapse.

@cthru…. Explain Eskom, SAA, SABC and other bodies. Has anyone been brought to book for transgressions.

Wrong. The fuel levy is transparently collected with a collection cost near zero versus e-tolling which has never got lower than 8% in the best-run and accepted systems in the world, and currently exceeds 100% in SA (Not a cent has gone into the roads – it has all gone to Kapsch, and government had to step in to bail SANRAL’s losses out).

The fact that the fuel levy goes into general revenue instead of a dedicated roads fund is a political decision which dates to 1986 and which the ANC government has conveniently ignored.

But it’s still a very effective collection method and easily ring-fenced, as proven by the fact that the RAF levy, pipelines levy, wharfage, wholesale margin and about 20 other levies and taxes are transparently collected via the fuel price.

“A tax that eases traffic congestion”. I personally don’t see any easing at all. In 2007 at 7h30am 1 would sit in three lanes of stationary or slow moving traffic between Beyers Naude and Malibongwe. In 2017 at the same time of day I’m sitting in four lanes of stationary or slow moving traffic. The only thing that’s changed is now I’m being asked to pay four times instead of three (taxes, vehicle license, fuel levy and now E-toll)to drive on a 30 year old road network.
Despite Sanrals pie-in-the-sky advantages of user pay: “We are all getting to work quicker hence we are more productive”. “We are all getting home quicker and are able to spend more time with our families.”We are all spending less on petrol, vehicle servicing and purchase of tyres”. But where is proof of this from the average Joe who is still spending 2 hours commuting from Pretoria to Joburg each day?

There is no proof, because it was all BS to start with. A scientific process would have been to study all the road funding options and choose the one which provided the greatest benefit at the least cost.

Instead, SANRAL picked tolling by default and then concocted a rainbows-and-unicorns fantasy about how it was the best. This included the after-the-fact (and now discredited) EIA done by that notable SANRAL shill and paid consultant, Roelof Botha, who famously said the poor must “shut up”.

SANRAL thus lost three cases at the ASA through forgetting that one can neither pick a turd up at the clean end, nor polish it, nor even roll it in glitter and re-sell it as a Christmas bauble.

If Sanral was a privately owned business it would be declared bankrupt and it’s assets (ie the roads) sold to the highest bidder. I initially thought it was the anc’s plan – to keep the voters happy and to get rid of the debtors. It turns out they simply don’t know what to do.

But, hey, a 20% compliance rate and Billions lost in a single year did not prevent the CEO from getting a performance bonus. So just keep milking the dying cow.

….and the only winner is Kapsch, the Austrian leeching buddies of zoompies since the weapons scandal days. cANCer admitted in a parly question that 74% of the money collected went to the Kapsch leeching nest in Austria. Ja swaer….

Austria is a type of no man’s land between continental Europe and the former Soviet Union with established business interests of commie expats with strong links to neighbouring Hungary and Czech Republic (just like between Scandinavia and Moscow – read SAAB). It has additionally just elected a far right president that promises to bring its disdain for the EU’s liberal refugee policy in line with Putin’s Russia where dissidents and minorities are casually incarcerated alongside gays, activists, opponents and journalists. Make no mistake that large state spending will continue to be skewed towards our comrades in the former Soviet bloc and likeminded allies and their penchant for meaty kickbacks.

Transnet has signed a huge and expensive rail project in Limpopo, fulfilled by the Chinese. SANRAL is once again the topic in the giant bridge the Chinese signed to build in the middle of nowhere on the Wild coast where the locals are even less likely to be bothered by final notice tolling bills. That’s after dodgy crane and locomotive deals between Transnet and Chinese parastatals being probed by the DA. Then there’s the exploration sweet spot off Mossel Bay given to Rosgeo while other oil companies are left shooting in the dark.

EFF will collapse the gantries when they come to power in 2019…

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