South Africa’s R20-billion e-toll mess
Over the last seven years, the government gave the South African National Roads Agency (Sanral) R19.6 billion in e-toll grants despite numerous warnings that the system would fail.
E-tolls went live in Gauteng in December 2013 as a way to fund the R20 billion Gauteng Freeway Improvement Project (GFIP).
The system required motorists to buy electronic tags and the installation of large toll gantries over freeways to collect toll fees from motorists without disturbing the flow of traffic.
Sanral insisted it was the best route to follow despite significant resistance from South African citizens and civil society organizations.
The Opposition to Urban Tolling Alliance (OUTA) was formed to fight e-tolls and legally challenge the system.
OUTA argued that the system was inefficient, contained many problems, had high administration costs, and would result in low compliance rates.
“E-tolls would have significant challenges and resistance from society to the extent that there is a strong chance this plan will fail,” OUTA said in 2013.
The government and Sanral dismissed all criticism and fought tooth and nail against anyone trying to block e-tolls.
Fast forward a decade, and OUTA was right. E-tolls failed, and the South African public had to foot the bill.
Gauteng Premier Panyaza Lesufi announced in early November that e-tolls would be scrapped.
Just like OUTA predicted, the e-toll system failed to achieve significant uptake and compliance and was highly inefficient at collecting money.
OUTA reported that at its peak in 2014, only 40% of motorists were e-toll compliant. It dropped to between 15% and 20% in later years.
As a result, e-toll revenue experienced a steady decline. In recent years the toll structure failed to generate even half of the estimated R1.7 billion operating costs of the toll system.
To cover costs, the e-toll system received taxpayer-funded annual government grants.
Sanral reports these government grants as funds paid to the GFIP, however, as the e-toll system is intended to finance the GFIP, any grants to the GFIP can be seen as grants to e-toll.
As e-toll payers slowly decreased, the annual government grants increased, with a R4.4 billion grant paid to the e-toll system in 2022.
After announcing the scrapping of e-tolls, Lesufi said that the ANC views the e-toll system as one of the main reasons the party lost so much support in Gauteng.
The e-toll system was a significant drain on South Africa’s finances and cost significantly more to build and maintain than the revenue it generated.
This article was first published by Daily Investor and is republished with permission.
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