Tolling company CEO’s plan to get e-tolls working again

CEO of e-toll collection company ETC, Coenie Vermaak says that the company has approached government with ideas on how to get the controversial e-toll system in Gauteng working again.

According to Vermaak, the government simply cannot pay for the e-tolling system, interest on debt, and the building of new roads on its own, and needs South African motorists and private businesses to step in.

He said that the user-pays principle is the only way to go, and that the e-toll system that is built and in place is more than adequate as a means to address this problem.

However, it requires road users to be compliant.

“Those who receive a direct benefit for services should pay for them. Roads are not for free. If we want world-class services, we must pay for world-class services. We should be proud of the e-tolling system we have,” he said.

Vermaak said that non-compliant road users have taken the view that it is their historic debt that is stopping them from becoming compliant. He said that ETC has made proposals to government to address this.

“We’ve said to them (government) we need to find a way for people to settle their historic debt, without burdening them financially,” he said.

“If we can write off a percentage of their historic debt, together with a strict enforcement plan, the system will immediately start working. Compliance levels will go up and then we’ll be able to fund phase two and three of the GFIP, create jobs, build new infrastructure and facilitate much-needed investments.”

ETC has been pushing for stricter enforcement of e-toll payments, and has sent thousands of summonses to road users who have accrued significant debt.

The company has also taken the position of warning motorists that they could be blacklisted as a result of non-compliance – a position that was weakened when credit agencies clarified that toll debt does not count against consumers’ records.

E-toll debate

Vermaak’s comments came during a debate with Outa CEO and e-toll opponent Wayne Duvenage at the fourth and final Transport Forum Working Group on road funding in South Africa this past week.

For his side of the debate, Duvenage said that Outa did not oppose new or upgraded road infrastructure or even e-tolling technology – noting that it works in environments that are fitting: such as Singapore, Hong Kong, or Mexico.

However, South Africa was not one of these environments.

“Society ultimately picks up the cost of road funding, so the funding mechanism selected must be in their best interest, at the lowest cost, and with efficient processes. It also needs to be introduced lawfully,” Duvenage said.

The Gauteng Freeway Improvement Project’s (GFIP) e-toll funding model relied on public buy-in and acceptance, accurate information and efficient systems as well as an effective regulatory and enforcement environment.

However, the GFIP was built on inflated costs, lacked transparency and did not have public buy-in even before it launched, he said.

Duvenage said that finding solutions for road funding in South Africa requires that road construction costs are free from collusion and corruption.

“Absolute transparency is necessary and the country must exercise caution when it borrows against inflated and meaningless asset valuations,” he said.

The Outa chief said that all existing and possible new road funding mechanisms need to be explored, including taxes, levies and other user-pay methods.

“The e-toll scheme is dead and barely covers the toll collection costs. To try and revive a defunct scheme is senseless and to keep suggesting that e-tolls is the only user pays scheme is incorrect,” he said.

Duvenage suggested that the R47 billion in e-toll debt be funded with a hybrid of national taxes and a 15c increase in the fuel levy. He also said that government should also establish a Road Funding Committee and introduce a Transport Regulator

Vermaak accused Duvenage and Outa of promoting lawlessness, saying that the lack of e-toll compliance has frozen development of new roads, hampering economic growth in the country.

“The reason phase two and three of GFIP are on hold and the fact we have a R16-billion interest bill is because we have people promoting lawlessness,” he said.

“Citizens need to take responsibility and be aware of the harm they are causing by stopping the building of road infrastructure which would create jobs and grow the economy.”

The ETC head said that national government cannot afford to pay for roads on its own and is unable to meet the funding requirements of basic services through general taxation.

“We have to create alternatives and partnerships with private businesses.”

Read: How much it would cost to replace all the roads in South Africa

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Tolling company CEO’s plan to get e-tolls working again