E-tolls fail to feature in the budget review

The controversial e-toll system on the Gauteng Freeway Improvement Project (GFIP) failed to get any direct mention in the 2021 Budget Review although there were general references to the “user-pay” policy.

The review said the financial positions of public entities and local government remain weak as a consequence of poor financial management, adding that medium-term debt redemptions of state-owned companies total R182.8 billion.

“Without rapid improvements in financial management and the resolution of longstanding policy disputes – including the user-pay principle – they will continue to put pressure on public finances,” it said.

However, an annexure to the Budget Review stressed, without making any reference to e-tolls on the GFIP, that until the user-pay policy for roads is fully implemented, the SA National Roads Agency (Sanral) will continue to have limited access to capital markets to fund its toll roads.

It said shifts in transfers to Sanral in previous years ensured that it met its financial obligations but compromised the quality of the non-toll network.

Decision long-delayed

The Democratic Alliance (DA) in Gauteng last week welcomed Transport Minister Fikile Mbalula’s indication that national government will provide certainty about the future of e-tolls on the GFIP by the end of March but called on Mbalula to stick to his promise this time.

This is a reference to Mbalula’s appointment by President Cyril Ramaphosa as head of a task team to report to the president on the options on the table with regard to e-tolls by the end of August 2019.

Mbalula subsequently said his stated aim was to achieve a “win-win” solution for government and society and a decision would be announced by cabinet.

A cabinet decision on the future of e-tolls was initially expected to be made by the end of 2019 but was postponed until the first cabinet meeting in 2020. An announcement on the future of e-tolls has still not been made.

Opposition

DA Gauteng Shadow MEC for Roads and Transport Fred Nel said last week that in light of recent announcements that all toll fees will soon increase, despite the desperate state of the country’s economy and subsequent damage to many livelihoods during the lockdown, it is even more important to get rid of e-tolls as soon as possible.

“E-tolls must go and any other announcement by the minister cannot be acceptable.

“The people of Gauteng must no longer be burdened by this nonsensical system,” he said.

Mbalula announced this week that toll tariffs on South Africa’s national roads will be adjusted by an average of 3.39% effective from March 1.

National toll roads

An annexure to the 2021 Budget Review provided some insight to the impact of the Covid-19 lockdown on Sanral’s three public private partnership (PPP) toll road concessions: the N3 toll road, the N4 East toll road and the N4 West toll road.

It said the effect of lower traffic volumes and revenue due to lockdown restrictions varies but stressed that all the PPP agreements specify that any loss emanating from traffic volumes is borne by the private operator.

The review said revenue collection on the N3 toll road between the Cedara interchange in KwaZulu-Natal and the Heidelberg South interchange in Gauteng has been affected by restrictions on interprovincial travel and the hospitality industry.

However, it said these revenue losses have not yet been quantified and the private operator will claim these losses from its insurer.

The review said traffic volumes at the N4 East toll plazas between Pretoria and Maputo dropped to 18% of pre-Covid-19 levels during the strict lockdown imposed in March 2020 compared to the same period in 2019.

However, it said total traffic volumes showed a gradual resumption of activity and were at about 80% between March 2020 and January 2021 compared to the corresponding months in the previous year.

Border delays

The review said additional Covid-19 regulations imposed at borders caused delays and a reduction in traffic movement between South Africa and Mozambique during 2020, and the December 2020 closure of border posts is significantly affecting toll revenue collections.

“Between August 2019 and July 2020, the private operator estimated a revenue loss of R298.7 million,” it said.

Revenue for the N4 West Bakwena toll road between Pretoria and Rustenburg is estimated to have dropped to 20% of pre-Covid-19 estimates in March and April 2020 compared to the same period in 2019.

“Between March and September 2020, revenue losses amounted to R371.3 million. The private operator is pursuing this claim from its insurer,” the review said.