Cabinet delays decision on e-tolls til next year

Government has delayed a decision on the future of e-tolls on the Gauteng Freeway Improvement Project (GFIP) until the first cabinet meeting next year, with it looking increasingly likely that e-tolls will be scrapped in favour of another road infrastructure funding mechanism.

Minister in the Presidency Jackson Mthembu said on Tuesday that cabinet had noted the report on e-tolls on the GFIP by the task team led by Transport Minister Fikile Mbalula and that a final decision on the recommendation of the task team, as contained in the report, will be made by cabinet in the new year.

Mthembu said the Department of Transport has done a lot of work on the options that are available and government is now discussing which are the most appropriate options, not only for the Gauteng e-tolls, but generally for improving the road infrastructure in the country.

Expanded mandate

“We expanded the mandate of the department to look into all these matters of Gauteng e-tolls and how do we use whatever mechanism we will agree on to also improve our road infrastructure throughout the country, in our rural provinces and everywhere else,” said Mthembu.

“At first their [task team] mandate was how do we fund the e-tolls in Gauteng? Do we reduce what we are now paying or do we do something else?

“But with time it was then added that can you also look on how do we improve our road infrastructure everywhere and what mechanism of funding should we be looking at. That is what the cabinet has to finalise.

“We can assure you that when cabinet meets next time in the new year it will finalise this issue,” said Mthembu.

“We will give South Africa an idea about what we are going to do with the Gauteng e-tolls but secondly we will also give South Africans an idea on how are we going to improve our road infrastructure throughout the country.”

Mthembu said all the public is being alerted to is that government is dealing with e-tolls on the GFIP but that “the decision that cabinet might ultimately arrive at might go beyond GFIP”.

“I think you will also be very proud of the options that cabinet would have agreed on,” he added.

Organisation Undoing Tax Abuse (Outa) CEO Wayne Duvenage believes there is a strong possibility cabinet will take a decision to scrap e-tolls on the GFIP in January but that Finance Minister Tito Mboweni will announce the decision in the budget in February, along with details of how it intends to finance the GFIP and other road infrastructure.

Duvenage believes this is why Electronic Toll Collection’s contract to manage e-tolls was extended for three months rather than a year.

He says it’s a good thing that government is having a discussion not only about the future of e-tolls but road infrastructure funding more generally, as well as the cost of road construction in South Africa.

Duvenage points out that 33km of a new road between Durban and Richards Bay was built for R10 billion. “There is something wrong with that price. We reckon that price is about 25% over what it should be.

“We are paying more than we should just for road construction. You cannot divorce road construction from the cost of road funding. It’s a problem.”

According to Duvenage, the SA National Road Agency (Sanral) was getting R5 billion a year from National Treasury 12 years ago, and is now getting R15 billion.

“It’s gone up 200% in 12 years. Something is wrong.”

Duvenage says nobody is denying the fact that government needs to continuously look at road funding around the country, but the problem is the 156km in Gauteng with its failed e-toll scheme. Government should, as it indicated it would, have made a decision on e-tolls long ago.

‘Fuel levy funding more than just roads’

Duvenage says government is getting R74 billion a year from the fuel levy,  R15 billion of which goes to Sanral, with further amounts going to the provinces – but every single year in February the fuel levy is increased by between 20c and 30c a litre.

Read: Petrol pump or cash cow?

He says the money needed for road infrastructure is available – but the money raised from the fuel levy is being used for general finances “because the country is in a mess and the fuel levy is funding more than just roads”.

Duvenage says the fuel levy is now the country’s fourth-biggest tax revenue stream and, as with all other taxes, is a tax on the people.