E-toll decision delay is now costing all of South Africa

Auditor-general Kimi Makwetu has warned that the continued impasse on Gauteng’s e-tolls has had a serious impact on the South African National Roads Agency (Sanral) and its ability to continue as a going concern.

Sanral manages more than 22,000 kilometres of roads across the country, with the agency’s ability to upgrade and maintain these roads severely impacted by its inability to collect funding from e-tolls which form part of the Gauteng Freeway Improvement Project (GFIP).

In a presentation to parliament on Tuesday (10 November), the auditor-general noted that decision on a future-funding model for GFIP has still not been finalised.

It added that the delays in the finalisation of the GFIP matter has negatively affected the financial sustainability of Sanral which had an accumulated loss of almost R15 billion as of March 2020.

This means that material uncertainty exists whether Sanral and other auditees can continue to operate in future, with the agency now technically insolvent.

“Sanral’s debtor’s impairment provision as a percentage of accounts receivable is still very high and increased from 90.6% to 94.8% which indicates that the recoverability of a significant portion of trade and other receivables (ie, e-toll fees) is in doubt.

“These events or conditions, along with other matter indicate that a material uncertainty exists that may cast significant doubt on the public entity’s ability to continue as a going concern,” Makwetu said.

Can’t roll-out infrastructure in other parts of the country 

In October, Transport minister Fikile Mbalula said that his department is being impeded from rolling out new road infrastructure projects because of a lack of resolution around e-tolls.

The minister said that president Cyril Ramaphosa’s cabinet is set to finalise a new funding model for the project after receiving proposals from his department.

Mbalula admitted that he thought the issue would have been resolved by now, but that the process has been impacted by the Covid-19 pandemic.

In September, Sanral said that the government needs to urgently decide on the future of electronic tolls in Gauteng province, as the coronavirus cuts its cashflow.

“We’re having to scurry around to ensure our liquidity,” Sanral chief executive officer Skhumbuzo Macozoma told the Sunday Times.

Macozoma said the decision on whether to keep the system or scrap it rests with President Cyril Ramaphosa’s cabinet. Only about 20% of users are paying e-tolls, the Sunday Times reported.

If cancelled, Sanral’s debt related to the Gauteng Freeway Improvement Project will jump from around R40 billion to R67 billion. South Africa’s lockdown to curb coronavirus cost Sanral more than R620 million.

Read: You will be fined for not paying e-tolls under South Africa’s new driving laws: DA