Next big e-tolls storm brewing in South Africa

Chief opponent to the scrapped e-toll system, Outa, is challenging road agency Sanral and the National Treasury over the figures presented as money owed on the controversial system, while residents wonder where the money to pay off the debt will come from.

Finance minister Enoch Godongwana announced during his mid-term budget (26 October) that Treasury and the Gauteng provincial government would effectively bail Sanral out of its debt obligations tied to the e-toll scheme, in a 70/30 split.

In effect, this means that Treasury would transfer R23.736 billion from the national government’s coffers to pay off 70% of Sanral’s debt, leaving the remaining tab to be picked up by the Gauteng government and its residents.

However, Outa is now disputing the figures presented.

“We read the National Treasury’s statement of 3 November 2022 regarding the Gauteng Freeway Improvement Project (GFIP) debt with disbelief,” said Outa CEO Wayne Duvenage.

“While Sanral may have a total debt of R45.936 billion, we cannot accept that R43.031 billion of this is attributed to GFIP.”

Outa noted that court papers put forward by Sanral in early 2012 – when the GFIP construction was virtually complete – showed that the GFIP capital cost amounted to R20.63 billion.

“We also know that Sanral’s liabilities in their 2012 financial statements reflect their capital market long-term bonds at R28.4 billion, and the total value of these bonds cannot all be attributed to GFIP,” Duvenage said.

According to Sanral’s financial statements from 2012 through to 2022, National Treasury has allocated R22.4 billion to Sanral for the financial management of the GFIP debt.

“This suggests that something is fundamentally wrong with Treasury’s statement that Sanral now has R43 billion debt relating to GFIP,” he said. “The GFIP debt is not R43 billion.”

Duvenage said that even if Sanral did not settle a single rand of the initial capital debt or the interest accrued, a bond of R20 billion over the past 12 years at 10% interest would not amount to more than R33 billion.

“The question we need answering is: what has Sanral done with the government grants received for GFIP over the last decade?”

Outa said that it is important that the Gauteng provincial government and National Treasury do not allow themselves to become hoodwinked by the numbers provided to them by Sanral.

“What is actually required is an in-depth look into Sanral’s financials, including how much was borrowed for GFIP and how Sanral allocated the grants received from Treasury over the years.

“There is too much smoke and mirrors related to these numbers provided by the government. Sanral and the government have indicated that the GFIP debt was not ringfenced, but that is not what was presented in the court cases that OUTA fought in 2012.

“What we now need is absolute transparency and clarity on the accounting principles that Treasury and Sanral have assigned to the numbers they are presenting to the public,” Duvenage said.

Clarity

National Treasury on Friday (4 November) provided some clarity over the fate of the e-tolling project in the province, noting that, until a gazette is issued that says otherwise, Sanral has a statutory obligation to collect any toll fees due to them.

This will remain the case until the Gauteng provincial government comes up with an alternative long-term way to collect revenue from users who use the roads – until then, it is business as usual for the tolling system.

Godongwana said that using e-tolls as they exist to fund 30% of Sanral’s debt is still an option, but this is now up to the Gauteng government to decide.

The finance minister said that he believes that the ‘user-pays’ system that the e-toll represented is still the most effective and equitable way to finance road infrastructure.

Gauteng premier Panyaza Lesufi has shot down this suggestion, however, saying clearly that e-tolls are no more.

“Whatever financial revenue model we use, e-tolling will not be one of them. We are going to consult people on the revenue model,” he said in a media address on Friday.

Premier @Lesufi outlines proposed financing model for the Gauteng Freeway Improvement Project (GFIP) pic.twitter.com/XeiRr9vvwH

— Gauteng Provincial Gov (@GautengProvince) November 4, 2022

Despite this, the premier was not forthcoming with any immediate solutions to financing the debt except to say that money would not be taken away from other departments.

Opposition party, the Democratic Alliance, said that this leaves too many questions unanswered.

“The DA welcomes his assurance that money will not be taken from other provincial departments and that the e-toll system will not be used to generate this required revenue,” it said.

“Since 95% of the Gauteng Provincial Government’s revenue is dependent on income from National Treasury, and the remaining 5% is already committed towards the province’s budget, it is hard to determine where the additional funds will come from.”

The party noted that one of the only ways for the province to raise revenue is through tax.

“The Premier needs to provide clarity about what exactly this new revenue model entails. Will it be a new provincial tax imposed on the already overburdened residents of Gauteng? We cannot afford to replace e-tolls with another form of taxation, the only way for the government to raise revenue.

Read: Government clears up what’s happening with e-tolls – and you’re not going to like it