Why government can’t get rid of e-tolls yet: Mboweni

Finance minister Tito Mboweni says that Gauteng’s controversial e-toll system cannot be scrapped unless a replacement revenue source is found.

Responding in a recent parliamentary Q&A session, Mboweni said that financing the Gauteng Freeway Improvement Project (GFIP) is done on a corporate finance basis and not a project finance basis.

This means that borrowing for toll roads is done on the basis that there is a revenue stream to finance the debt, he said.

“A significant portion of the South African National Roads Agency’s existing debt was to finance the upgrade of roads on GFIP and it requires a revenue stream to finance it, so e-tolls cannot be abolished without a revenue stream to finance existing commitments.”

No decision

In November, Transport minister Fikile Mbalula said that cabinet has not made an official decision on the future of e-tolls.

Mbalula said that his department tabled a number of proposals regarding the controversial toll scheme, with cabinet set to debate these possibilities later in November.

He said that these proposals would form a ‘reconfigured approach’ following disagreements between the national government, the department of transport, and Gauteng government.

“We are not only looking at extending the Gauteng Freeway Improvement Project (GFIP), (but) are also looking at the ‘scrapping’ of e-tolls,” he said.

“The preferred option will take into consideration the interest of society, the indigent and road users as well as the state of the economy.”

However, Mbalula acknowledged that the country has previous bond and debt commitments which meant that it was difficult to move away from the ‘user pays’ model.

Read: Government flip-flops on the future of e-tolls

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Why government can’t get rid of e-tolls yet: Mboweni