Why is the province of Gauteng being asked to pay off whatever debt the national authorities incurred in 2008 when the electronic toll scheme was approved? OUTA asks.
- Gauteng’s controversial electronic toll system was due to be phased out by the end of 2022.
- But its end was delayed amid talks between the national and provincial governments over who should foot the bill.
- The Undoing Tax Abuse Organization points out that there is a lack of clarity about if, and how, motorists will be reimbursed.
- For more financial news, Go to the News24 Business Cover.
Lack of clarity on four main issues, including how and when motorists will be reimbursed, appears to be stalling the removal of electronic tolls in Gauteng, says the Organization to Reverse Tax Abuse (OUTA).
The electronic toll system was due to be phased out on December 31, 2022 after Finance Minister Enoch Godongwana effectively announced its end during his most recent medium-term budget policy statement.
Godongwana announced that the government would assume 70% of the debt of the South African National Highway Agency (Sanral), while the province would assume 30%.
But the removal of the system has been delayed as key sections of a memorandum of understanding between the national government and Gauteng have yet to be finalized.
Sanral had always had trouble recovering Gauteng Expressway Improvement Project (GFIP) costs through electronic tolls, as many motorists failed or refused to pay them. Electronic tolls have also faced opposition from civil society groups such as OUTA and the Cosatu labor federation.
A chronic default on payments eventually brought Sanral’s debt burden to over R40 billion.
When will it end?
In OUTA’s view, the end of the electronic toll system will continue to be delayed unless the national government and the province of Gauteng provide clarity on issues such as how motorists will get refunds and why Gauteng should have to pay anything.
“Why is the province of Gauteng being asked to clear any debt that the national authorities, the Departments of Finance and Transport and Sanral, entered into some fourteen years ago in 2008 when the electronic toll scheme was approved?” asks OUTA CEO Wayne Duvanage.
It notes that Sanral managed the infrastructure upgrade of the Gauteng motorway and reported to the Departments of Transport and Finance. Of the government guarantees to back the bonds assumed by Sanral, only R21 billion belonged to the Gauteng Motorway Improvement Project (GFIP).
OUTA says that secondly, clarity is required on exactly how much the province is expected to contribute 30% and how the figure is derived. Even if Gauteng has been convinced to contribute 30% of the bonds, it should only cover 30% (R6.3bn) of the R21bn lent for the GFIP, in OUTA’s view.
“This is not a rand43bn problem that Gauteng province should take on, even if they add interest to GFIP’s rand21bn debt to date,” Duvenage argues.
“In addition, between 2012 and 2022, the National Treasury bailed out Sanral to the tune of R22.4 billion, specifically for the GFIP debt, which is well above the equity portion of the project’s cost of capital. The interest of GFIP’s bond debt amounts to no more than R17 billion since 2008”.
On top of this, OUTA suggests Gauteng province should ask why SANRAL paid “excess costs” of R17.9 billion for the GFIP upgrade, before electronic toll gantries added another R3 billion of infrastructure costs. To the mix. OUTA estimates that, at most, the GFIP project should have cost society no more than R9 billion.
“Gauteng province should not foot the bill for SANRAL’s gross inefficiencies and incompetence,” says Duvenage.
A third issue for clarity relates to Gauteng Premier Panyaza Lesufi’s comments that motorists in the province will be consulted on the best way to raise revenue after the failure of the electronic toll collection system.
“We are pleased that the Prime Minister has indicated that he intends to consult widely with the people of Gauteng on the best way to extract funds from Gauteng residents, presumably to cover Gauteng’s 30% commitment from one party. of Sanral’s debt,” says Duvenage.
“However, we do not see how this will be imposed on Gauteng citizens in the form of additional provincial taxes without making Gauteng a more expensive province to live in and do business with. We look forward to your inquiries.”
The fourth issue OUTA wants clarity on relates to Lesufi’s comments that almost R6.9bn will be refunded to motorists who have been paying electronic tolls.
There has been a “clear decision” that motorists who have been paying electronic tolls should receive some sort of refund, Gauteng Premier Panyaza Lesufi said on the John Perlman Show at 702 on Wednesday. He said such refunds would amount to about R6.9 billion. A decision has yet to be made on what form those refunds will take, for example, in cash or as credit for future use of other toll roads, according to Lesufi. He said that all uncertainties would be cleared up in his next speech on the state of the province.
“OUTA applauds that the authorities are now considering or committing to refund the electronic toll fees paid by motorists and businesses since December 2013. However, what remains unclear is that these comments are made by the Premier of Gauteng, when in it was actually Sanral who billed motorists and collected the fees,” says Duvenage.
“This matter requires a full statement from Sanral as to whether and how previously paid electronic toll fees will be fully refunded. Sanral is the entity that knows who owes what.”
