Road users will fund e-toll expansion: Treasury

Treasury says that not only will the current e-toll system remain, although under a revised format, it is still on course to extend the project.

Lungisa Fuzile, director-general of the National Treasury, said: “Maybe there could be adjustments that still don’t violate the principal of user pays, that retains every good aspect of the GFIP (Gauteng Freeway Improvement Project)…but help improve compliance to make sure that not only is the system viable this way but future ones too can be viable and the mechanism can be extended even beyond where it is, in time of course, after following all kind of due processes.”

In his 2015/16 budget speech in the National Assembly on Wednesday (25 February), Finance Minister Nhlanhla Nene said e-toll tariffs will be adjusted downwards, echoing Gauteng Premier David Makhura, who said earlier in the week that a revised e-toll system will provide ‘major financial relief’, and will also have an easier payment model.

Nene said that further government funding could be expected when he tabled his adjustments appropriation in October this year, providing some succour for both road users and the SA National Roads Agency Limited (Sanral).

E-tolling was implemented on Gauteng highways in December 2013, following several court challenges to halt the project.

However, following mass rejection of the system by motorists, Premier Makhura established a panel to seek a more equitable and sustainable way forward.

In January this year, the panel recommended a hybrid payment model – incorporating some of the following:

  • Funding from the provincial fiscus;
  • A reduced-cap e-toll;
  • A ring-fenced national fuel levy;
  • Increasing and ring-fencing the cost of advertising on toll routes;
  • Increasing and ring-fencing vehicle license fees;
  • Increasing fees for tyres;
  • And recovering funds from the construction industry.

What would have felt like a rubbing of salt into the wounds for many who thought the system might be scrapped altogether, Nene said on Wednesday: “Cost recovery from road users will continue to be the principal financing mechanism for this major road system.”

Currently, those motorists in Gauteng with an e-tag are capped at R450 a month to use e-tolled roads. Government has not yet announced what the reduced cap will be.

Many e-toll opponents, led by The Opposition to Urban Tolling Alliance (Outa), had long since called for an increase in the fuel levy, to fund the GFIP.

On Wednesday, Nene also announced the general fuel levy would increase by 30.5c/litre and the Road Accident Fund levy by 50c/litre, effective from April 1.

Outa spokesperson John Clarke said that had the authorities decided to apply their existing Fuel Levy policy to finance the GFIP bonds, by allocating a mere 10 cents per liter of the past increases (or an extra 10c) for the project at that time, the project’s entire capital cost of R17.9 billion would have already been raised by today.

“We simply cannot understand why the authorities chose to ignore the application of its existing fuel levy policy in this regard.  Instead, they appear content kick this can down the road, exploring other complex options, whilst fighting with the remaining 30% of paying road users through Sanral’s Violations Processing Centre. ”

More on e-tolls

New e-toll system to give ‘major financial relief’

E-toll tariffs getting cut

Why the new e-toll proposals won’t work

E-tolls will stay, says Gauteng premier

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Road users will fund e-toll expansion: Treasury