Sunday, January 16

The government fails again to pronounce on the future of electronic tolls

Once again, the government has not ruled on the future of the controversial electronic toll scheme in the Gauteng Highway Improvement Project (GFIP).

This despite the fact that the Minister of Transport, Fikile Mbalula, declared last month: “We hope that the Minister of Finance, when he delivers the Declaration of medium-term budget policy in November 2021, will pronounce on electronic tolls. By that time, we believe that the Cabinet will have finalized the matter, ”he said.

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However, the 2021 MTBPS document only addressed the political uncertainty about the government’s position on the principle that the user pays.

It said SA National Roads Agency Limited (Sanral) has incurred annual average losses of R2.5 billion since 2014/15 and has been unable to successfully issue a bond since 2017, largely due to uncertainty about the government’s position. on the principle that the user pays. .

The MTBPS said that the government has extended a total guarantee service of R37.9 billion to the agency, of which R28.4 billion had been used as of March 31, 2021.

“While political uncertainty persists, Sanral remains responsible for maintaining its toll portfolio and continues to service the debt used to finance construction.

“To date, 5.5 billion rand in toll revenue has been collected compared to an initial projection of 20.2 billion rand.

“Without a political decision to restore government support for the user-pay principle, Sanral will continue to be a significant burden on public finances,” he said.

Dr Mampho Modise, deputy director general responsible for public finances at the National Treasury, said on Thursday in response to a question from Moneyweb that they are still calculating the risks for possible options for the future of electronic tolls.

“As you can imagine, finding a fair way to deal with electronic tolls has not been easy.

“The issues there are very complicated and we as technocrats have presented the different options that we think politicians should consider but the discussions are still taking place. [and hopefully the minister can give us an update when he has the press conference].

“Once the Minister is satisfied with the progress made, he will certainly make an announcement. I’m not sure when he’s going to do that [We can ask him when we have the press briefing at 10am] but we are in the final stages of finalizing the proposals of how we continue or how we advance in terms of electronic tolls, “he said.

The Undoing Tax Abuse Organization (Outa) has estimated that only about 15% of motorists using the GFIP are now paying their electronic toll bills.

The reference is the various options that are being considered to resolve the electronic tolling deadlock that follows President Cyril Ramaphosa in 2019, by appointing Mbalula to head a task force to inform about the options available for the future of electronic tolls for August 2019.

During his budget voting speech in May this year, Mbalula said that he had presented nine possible solutions to the impasse of electronic tolls to the government and confirmed that the first of these options is “to eliminate electronic tolls.”

The executive director of Sanral, Skhumbuzo Macozoma, in September this year asked the government to “bite the bullet” and make a decision on electronic tolls and the Gauteng MEC for Public and Road Infrastructure Jacob Mamabolo reiterated in an interview that the position Gauteng provincial government official on Electronic tolls in the GFIP remain to be eliminated.

The latest SA National Highway Agency annual report released last month revealed that GFIP revenue decreased by 31.5% to R207 million in the year to the end of March 2021 from R452 million in the previous year.

Sanral said this project is the only Sanral toll road to receive a government grant to offset the fare discounts instituted in response to public opposition to tolls on Gauteng’s highways.

“In 2020/21, this subsidy amounted to R2 721.8 million, which includes R2 300 million that the Minister of Transport, as the sole shareholder of Sanral, approved as a transfer from toll-free operations to toll operations to reduce the expected deficit in revenue collection. ,” He said.

Sanral added that the government has indicated and shown its willingness to provide financial support to the GFIP electronic toll project while a solution is awaited.

He said that therefore the agency has included a budget transfer of R3.25 billion, excluding VAT, per year during the medium-term expenditure framework (MTEF) ending in the 2022-23 financial year to cover the deficit. in electronic tolls.

“Although final approval of this additional transfer from Parliament is still awaited, based on past experience, management concludes that it is inevitable that it will be granted to ensure that the entity does not default.

“Material uncertainties about the future of GFIP as a single going concern are expected to be mitigated through direct government support and viable sources of funding,” he said.

It said that gross toll debtors amounted to R9 779 million, which was reduced by a cumulative expected loss of life allocation of R9 646 million.

Sanral said that although the debt is not written off, the impairment reflects expected losses and is assessed annually at the end of each reporting period.

He added that the inability to solve the GFIP electronic tolls problem continues to put significant pressure on Sanral’s balance sheet, compromising its ability to obtain funds and exacerbating uncertainty regarding the future of highway financing.

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