How much it would cost to scrap e-tolls right now

Gauteng’s e-tolls continue to act as a major money sinkhole, as the system demands hundreds of millions of rands in monthly debt repayments.

Presenting to the Standing Committee on Appropriations, National Treasury officials said there is still a significant shortfall between the amount of the money being collected by the tolls, and the amount of money owed in debt repayments.

According to Treasury, cash collection for the Gauteng Freeway Improvement Project (GFIP) now stands at R65 million per month – significantly lower than projected.

It added that the South African  National Roads Agency Limited (Sanral) needs R240 million each month to service the GFIP debt.

To combat this increasing debt, Treasury previously shifted R1.9 billion from Sanral’s non-toll allocation to the GFIP in 2017/18 to enable Sanral to meet its funding requirements and, the cash requirements for the GFIP.

Cancelling e-tolls 

Treasury also commented on the growing debts of the GFIP programme and the costs involved in the event that e-tolling is terminated, or if there is a default in the guarantee.

‘The financing scheme essentially involved that, of the total debt of R21 billion incurred by Sanral to fund the GFIP in the first phase, a total of R19 billion has been guaranteed by the South African government acting through National Treasury,” it said.

Since it launched, and the subsequent failure to pull in the necessary funding, Sanral’s debt has increased to R47 billion, of which, 83% is due to the GFIP – about R39 billion.

Treasury has issued Sanral with two guarantees totalling R38 billion (one of R31.9 billion and one of R6 billion), of which the road agency has used up R28 billion – leaving an R11.1 billion balance.

In the event of the termination of e-tolling or default in the guarantee, government may have to support the balance of the unguaranteed debt of R11.1 billion in addition to the guaranteed debt, Treasury said.

Looking for solutions

The e-tolls saga has been highly divisive, both within government and among civil society and businesses tied to the project.

Gauteng Premier David Makhura has made it clear that it is the provincial government’s plan to do away with the system entirely – however this has been met with contradictory responses from national government, specifically finance minister Tito Mboweni who believes motorists should pay their e-tolls.

Toll collection company ETC, which is wholly owned by the Austrian company that built the e-toll system, was contracted at R9.9 billion to collect e-tolls in the country, and has also thrown its lot in with Treasury on the side of keeping the controversial system running

ETC has dismissed alternatives to the system, saying it is the only fair way to pay off the debt.

However, anti-tolling group Outa, which has fought against the system long before it was even implemented, says that it has failed, and to continue with it would only lead to the debt problem getting worse.

Outa has suggested alternatives to e-tolling, including a ring-fenced fuel levy and other government interventions – including getting money back from construction companies, which it said overcharged in the building of the e-toll network, and dropping ETC when its extended contract period comes to an end.

President Cyril Ramaphosa has tasked Transport minister Fikile Mbalula to find a solution to the problem.

Read: People won’t fall for ‘delusional’ e-toll debt write-off scheme, says Outa

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How much it would cost to scrap e-tolls right now