Scrapping e-tolls is not a job killer: OUTA

The Organisation Undoing Tax Abuse (OUTA) has rejected claims by Electronic Toll Collection (ETC) that scrapping the Gauteng e-toll system could lead to as many as 38,000 potential job losses.

The civil rights organisation was reacting to comments made by Coenie Vermaak, the CEO of the Austrian-owned ETC which collects tolls on behalf of the South African National Roads Agency (SANRAL).

Vermaak in turn, was reacting to comments made by new transport minister, Fikile Mbalula, suggesting that the controversial system could be scrapped.

“The solution could be that the e-tolls go but if they go, how are we going to address the issues that we are faced with in terms of the debt? The strategic goal is to ensure that South Africans are part of the solution in the long term,” Mbalula told the SABC.

“It is not an easy issue that we say scrap and that is it. The fact of the matter is that people are not paying and the debt is ever-growing.”

Vermaak said that an end to e-tolls would lead to a loss of 1,200 direct jobs at ETC, and 1,000 indirect jobs from a number of its suppliers, the Centurion Rekord reported. He added that the remaining jobs were to be created during phases two and three of the Gauteng freeway improvement project.

However, OUTA said that although ETC employs approximately 1200 staff, “it sucks around R60 million from Gauteng motorists’ pockets each month to finance an administrative system that has failed to meet its objective of financing a R20 billion road upgrade bond”.

“What Mr Vermaak is implying is that without e-tolls, neither South Africa nor the Gauteng province is able to build additional road infrastructure to cater for congestion,” said Rudie Heyneke.

“South Africa has financed provincial and national roads using Treasury allocations to SANRAL and the provincial administration for decades. To imply that road construction and subsequent jobs will be lost if the e-toll scheme is scrapped is a misleading statement that smacks of sensationalism and desperation.”

It stated that ETC failed to mention that it was contracted at R9.9 billion to administer the scheme over five years, before any funds flowed to offset the excessive freeway bonds.

This equates to an administrative fee of around 61% of the finance costs, which is extremely excessive and would have seen the Austrian-based company being unduly enriched at the expense of the South Africa road user.

OUTA said that ETC’s e-toll contract has expired and there is no reason to perpetuate its failure any longer.

“Had OUTA’s suggestion of a 10 cents addition to the fuel levy been applied from the start, the existing freeway bond would already have been financed and this small addition to the levy could have been used to finance the rest of the upgrades now overdue.

“Contrast this potential situation with the failed scheme that has only enriched an Austrian company with no provisions made toward the freeway bonds, and you have the reason for scrapping the e-toll schemes as soon as possible,” it said.

Vermaak has previously stated that a fuel levy alone, is not a viable option.

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

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Scrapping e-tolls is not a job killer: OUTA