e-tolls sanral

e-tolls / File photo

Gauteng’s e-tolls draining South Africa’s road maintenance funds

The South African National Roads Agency (Sanral) is diverting funds from other projects to keep e-tolls afloat.

e-tolls sanral

e-tolls / File photo

Gauteng’s e-tolls system is currently draining funds from the South African National Roads Agency (Sanral).

The much-despised tolling system, which, since its inception, has been defiantly fought by motorists in Gauteng, is causing further anger amongst South Africans, as its severe drain on Sanral has been brought to light.

While most motorists understand that Sanral should be made to pay for its ill-conceived tolling system, it’s now been revealed that the e-tolls are eating up money that is supposed to be used for the maintenance of all roads in South Africa. This is wholly problematic.

Sanral’s financial report paints a grim picture

As part of its integrated report for the 2017/2018 financial year, Sanral chairperson, Roshan Morar, confirmed that for the first time in the organisation’s history, it was ‘forced’ to divert funds from non-toll business to the toll road portfolio in order to keep the e-tolls system afloat.

Morar bemoaned the fact that the majority of Gauteng motorists continue to default on payments of the tolls, which has led to an outstanding debt of almost R11 billion. Worse still, is that government owes service providers and various stakeholders an estimated R67 billion.

In order to offset the loss incurred by the e-tolls system, Sanral repurposed R1.6 billion. Morar has since justified this exorbitant expense by stating:

“This transfer, made with the concurrence of the minister of transport, was to reduce losses incurred as a result of sustained non-payment of toll fees by users of the roads constructed under the Gauteng Freeway Improvement Project (GFIP).

All other toll roads managed directly by Sanral and through concessions operated smoothly – with increased use of e-tags on these routes – and were economically viable.”

As reported by Business Tech, what this effectively means is that Sanral’s 13 000 km of non-toll roads is now helping to pay for just 187 km of Gauteng’s e-toll roads.

Why not just scrap Gauteng’s e-tolls?

While the ruling African National Congress (ANC) at first seemed keen to scrap the e-tolls system in favour of the populist vote, it has now been reeled in by the reality of financial liability. Transport Minister, Blade Nzimande, backtracked on statements made by his party, arguing that e-tolls would be staying put until the main stakeholders could reach some sort of financial agreement, saying:

“We owe an amount of R67bn on the building of these wonderful freeways. The issue is who is going to pay, and how are we going to pay?”

Coenie Vermaak, the Chief Project Officer at Electronic Tolling Collections (ETC), the company contracted by Sanral to collect e-tolls, also added that the scrapping of the system would be financially devastating for government, saying:

“What we understand today is that Sanral borrowed initially about R22.5 billion through bonds to finance the construction of the Gauteng Freeway Improvement Project…effectively what will happen when the project gets scrapped is there is no income and that will breach certain governance within Sanrals agreements with the lenders and immediately the R22.5 billion that became in total around R40 billion that we are aware of will become payable virtually immediately..”

The Organisation Undoing Tax Abuse (OUTA) has described the e-tolls system as a complete failure. According to the organisation, Sanral is making very little money from Gauteng’s e-tolls, largely due to legal challenges faced by Sanral and its associates.

Nzimande revealed that only 3,724 (24%) of the 15,505 summonses issued from in the last three years have actually been served on the defendants. Outa’s lawyers are currently defending 1 028 of those cases under its e-tolls defence umbrella.

The minister also revealed that in the last two years, only R10.231 million was collected through legal processes, which cost ETC R4.6 million in legal fees. This pales in insignificance compared to the R11 billion owed by motorists.