National Treasury has proposed to allocate R23.7 billion from the national fiscus to settle the South African National Roads Agency’s (Sanral) debt and deal with e-tolls once and for all.
Speaking during the latest Medium-Term Budget Policy Statement (MTBPS), finance minister Enoch Godongwana said that the uncertainty surrounding the Gauteng Freeway Improvement Project, which includes e-tolls, continues to have a major negative implication for road construction in the country.
The minister said that South Africa’s road network must be brought back up to efficiency and functionality. Since 2013, e-tolls have been met with resistance from motorists – leading to non-payment by many and calls to scrap the system altogether.
Opposition groups like Organisation Undoing Tax Abuse (Outa) and opposition party, the Democratic Alliance, have called for the scrapping of the system in its entirety.
In light of this, the finance minister said that the Gauteng provincial government has agreed to contribute 30% to settle Sanral’s debt and interest obligations, while the national government will cover 70% of the debt.
“Gauteng will also cover the costs of maintaining the 201 kilometres and associated interchanges of the roads.”
Godongwana noted that any additional investment in the road network would still have to be funded, however. This is up to the Gauteng provincial government to decide.
It suggested that this can be done through:
- The existing electronic toll infrastructure;
- New toll plazas or;
- Any other revenue source within their area of responsibility.
The finance minister said that any funding given to a state-owned entity will now be subject to strict pre-conditions that must be met prior to the government support being received. “Non-compliance to conditions means no funding.”
The funding is conditional on a solution to phase 1 of the Gauteng Freeway Improvement Project being found – effectively shifting where e-tolling goes from here back to the transport department and Gauteng government.
Godongwana said that the National Treasury is tabling a Special Appropriation Bill to provide additional funding to the South African National Roads Agency (Sanral) in order to allow for it to adjust its business model and restore its long-term financial viability.
This comes after Sanral said that it has been relying on government grants to fulfil its mandate, not the e-toll system. According to the road agency, government assistance has become a significant supplementary source of funding for the toll portfolio over the past three financial years.
Responding to the announcement by the finance minister, Gauteng premier Panyaza Lesufi said that he welcomed the finalisation of the e-toll saga, and that his administration would consult with Sanral on how to repurpose the e-tolling systems.
“The matter of people who have already been paying for e-tolls is in the purview of Sanral.”
— GautengGov (@GautengProvince) October 26, 2022
Sanral has already been making plans to transform e-tolling with the group aiming to shift the e-tolling system to a “value-added services” system.
The tender document sought a host of services, including complex back-end systems, including transaction clearing, violation processing and other value-added services.