Decision on e-tolls is imminent, says Mbalula

A decision by the government on the future of the e-toll system on the Gauteng Freeway Improvement Project (GFIP) is “imminent”.

Transport Minister Fikile Mbalula, who has previously made several commitments about the deadline for government to announce a decision on the controversial scheme, said this after delivering his budget vote speech on Friday.

“I’m not a rogue. I’m part of a collective and part of cabinet. E-tolls is a decision that requires government. Yes, I lead that. That is my responsibility.

“I have presented nine possible solutions to the e-tolls impasse, which I inherited. It is not easy because if it was easy, a solution could have now been pronounced.

“Government is on the verge of resolving this matter and the National Treasury has been mandated to work with us to resolve this matter.

“It’s a tough job balancing the government’s books,” he said.

“We are near to finding a solution to this matter and a sustainable, responsible [decision] within the available legal framework.

“An announcement is imminent. I have therefore not misled the NCOP [National Council of Provinces],” he said.

Mbalula made his most recent e-tolls deadline announcement on May 6, when he told the National Council of Provinces (NCOP) that a government announcement on the future of e-tolls would be made in the next two weeks.

This meant an announcement should have been made by the end of last week (May 20).

Read: Government fails to meet its own deadline (again) on the future of e-tolls (May 21)

Organisation Undoing Tax Abuse (Outa) CEO Wayne Duvenage said last week the organisation will not be surprised if an announcement on e-tolls is not made because of missed deadlines in the past.

“Fikile just keeps digging this hole and the trust deficit keeps getting wider and wider,” he said.

Mbalula confirmed on Friday that the first of the nine options presented to government to resolve the issue was “to scrap the e-tolls”.

However, Mbalula highlighted the financial commitments that have been made in terms of the repayment of the debt to finance the GFIP.

The bigger issue

Mbalula said “scrapping [e-tolls] means nothing”, stressing the bigger issue is servicing the debt and that for the government to sustain its position on the bond market, it has to live up to its obligations.

Mbalula confirmed he wanted to make an announcement on e-tolls before his budget vote speech on Friday and the start of the department’s new financial year but was unable to do so.

“It is part of the agenda because it is huge in relation to our funding model and what we want to do in terms of road infrastructure in the country. So we have got to decide on it,” he said.

Sanral

Mbalula added that the government could not consider the scrapping of e-tolls without also looking at the future funding model of the SA National Roads Agency (Sanral).

In his budget vote speech, Mbalula said that in the National Department of Transport’s 2021/22 budget, expenditure is expected to increase at an average annual rate of 8.1% from R57.3 billion in 2020/21 to R72.5 billion in 2023/24.

Although the substantial share of the department’s expenditure is directed towards rail infrastructure, maintenance, operations and inventories, the balance of the budget is reserved for Sanral for the upgrading and maintenance of the national road network, as well as provinces and municipalities for the construction, operations and maintenance of transport infrastructure and services, he said.

Read: Sanral is unable to meet its financing obligations (Oct 2020)

“Sanral plays a crucial role in the upgrading, maintaining and rehabilitation of our national road network.

“Transfers to the agency account for 31% of the department’s budget and 62.2 % of the department’s budget for road transport specifically,” he said.

Mbalula said a core focus over the medium term is the upgrade of the R573, popularly known as the Moloto Road, with an allocation of R2.7 billion.

He said transfers to fund reduced tariffs for the GFIP amounted to R2 billion over the medium term, while 53.6% or R34.8 billion of allocations to the agency are to maintain the national network of non-toll roads.