The huge debt caused by e-tolls

Despite the government’s best efforts, Gauteng road users have been unwilling to pay their e-toll bills.

Outa CEO Wayne Duvenage has said that this is because citizens aren’t willing to subsidise what they believe to be an inefficient system.

“The main reason this scheme has failed is due to the lack of trust citizens have in our government on the e-toll decision,” said Duvenage.

“The public are fully aware that this infrastructure must ultimately be paid for by society, but we are not willing to pay for grossly inefficient systems that have extremely high administrative costs.”

The most recent financial statements from Sanral confirmed that toll systems in South Africa are dysfunctional and are costing the state-owned enterprise billions of rand.

Sanral debt

Sanral recently responded to a request for comment from MyBroadband regarding its debt situation.

It said that its non-toll portfolio, which comprises 87% of its business, is completely debt-free.

However, its total toll portfolio debt – which makes up the remaining 13% of its business operations – has climbed to R47 billion.

Sanral said it is taking measures to manage its toll portfolio’s financial issues.

“Sanral has budgeted to internalise the Gauteng Freeway Improvement Project (GFIP) risk with the transfer of R2.53bn for the next three years,” said Sanral.

“Additionally Sanral is fairly advanced in concluding loan agreements with DFIs to fund both new capex projects as well as refinancing maturing debt.”

The e-toll system has failed

The AA recently published an open letter to Minister of Transport Fikile Mbalula outlining the flaws in the Gauteng Freeway Improvement Project, which it has researched extensively.

“The findings of the research are clear and unambiguous: the current model for the Gauteng Freeway Improvement Project (GFIP) has failed and will continue to fail if pursued,” the AA said.

The AA added that this is not just its view, but also the view of citizens who are being asked to pay for the e-toll system.

The findings highlight explicitly that most users are not paying because of a principled position taken years ago and that no amount of cajoling or enticement will change their minds.

The AA added that the only fair and feasible method of road fund collection remaining is to link it to the General Fuel Levy.

“Pursing any alternative, we believe, will prove fruitless and will only further harden the position of those who are not paying.”

Outa’s 4-step plan

In July, Outa published its four-step plan to settle e-toll debt:

  1. Renegotiate the debt with the PIC.
  2. End the collections contract with Electronic Toll Collections (ETC).
  3. Reassess the budget to include allocations by National Treasury towards the debt, including a possible allocation from the fuel levy.
  4. OUTA believes that Sanral may be owed more revenue from the profits made by the three main toll concessionaires on long-distance tolled routes. Outa urges Treasury to investigate these contracts and reclaim funds owed to Sanral.

Duvenage added that if Outa’s suggestion of a 10 cents addition to the fuel levy had been applied instead of e-tolls, the current freeway bond would be completely financed and the addition to the fuel levy could be used to finance other overdue upgrades.

Now read: Petrol price increase expected for September

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The huge debt caused by e-tolls