E-tolls are the “most expensive and inefficient scheme in the world”

Outa has criticised Cabinet’s task team’s reported plans for fixing the e-toll system, such as charging 10c per gantry and reducing e-toll prices by 70%.

According to Outa, reducing e-toll tariffs will not convince South Africans to pay their bills, and will instead make matters even worse for the “most expensive and inefficient scheme in the world”.

“What is needed is to abolish the e-tolls and seek alternative funding for the Sanral debts,” said Outa CEO Wayne Duvenage.

No compliance

According to Outa, current compliance levels for paying e-tolls are about 20%, which means that the system is failing to collect almost R250 million per month.

This means that even if everyone paid their e-tolls at a 70%-reduced rate, it would not bring in much more revenue for the country than is currently the case.

Another tactic that has been put forward by the government to solve the e-toll problem is to cancel a percentage of past debt for every year users pay their e-tolls.

However, Outa believes that this will not work.

“Reducing the toll tariffs or reversing past debt to entice the public to come on board will never resolve the GFIP bond payment problem,” said Duvenage.

Outa added that Sanral has previously tried the same tactic by offering a 60% discount on outstanding tariffs – which only raised 2% of the outstanding debt while compliance continued to decrease.

Scrap the system

Outa said that there is no way to fix the e-toll system, and other countries have cut their losses.

“The administrative environment in South Africa will never support an efficient e-toll scheme and it is time for our government to realise this, as have other countries around the world which abandoned their failed e-toll schemes,” said Duvenage.

“The Gauteng e-toll project is the most expensive and inefficient scheme in the world and will never achieve its intended aims of financing the overpriced Gauteng freeway upgrade.”

In July, Outa outlined 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), as this is a massive and unnecessary cost.
  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.

The big e-toll debt problem

MyBroadband recently asked Sanral about its levels of debt, and the SOE made it clear that tolls are the only reason it is suffering financially.

“It is important to note that Sanral manages two portfolios – toll and non-toll,” said Vusi Mona, General Manager of Communications at Sanral.

“The non-toll portfolio, which is 87% of SANRAL’s business, is healthy and there is no debt.”

However, the other 13% of SANRAL’s business – the toll portfolio – is sinking under R47 billion in debt.

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

Now read: New e-toll plan – Charge drivers 10c per gantry

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E-tolls are the “most expensive and inefficient scheme in the world”