Government has yet to make (or reveal) its decision on e-tolls

Government still has to make a decision on the future of e-tolls on the Gauteng Freeway Improvement Project (GFIP).

Finance Minister Tito Mboweni failed to even mention e-tolls in his budget speech on Wednesday and there were only two sentences in the budget review that specifically mentioned e-tolls.

Among the risks to the fiscal outlook mentioned in the review was “clarity on government’s position on the user-pay principle as it relates to e-tolls”.

And: “Declining e-toll revenue will have to be offset by other measures to repay South African National Roads Agency Limited [Sanral] debt.

“It could also affect funding for other investment projects,” it said.

According to Business Insider South Africa, Treasury officials said there is a plan in place to address the e-tolls situation. However, it is not Treasury’s prerogative to release the plan but the Department of Transport’s.

Ministry of Transport spokesperson Ayanda-Allie Paine told Moneyweb on Wednesday the department is waiting for cabinet to make a decision on e-tolls “so we can announce what they have agreed on.”

Outa shocked

Wayne Duvenage, CEO of the Organisation Undoing Tax Abuse (Outa), said it is shocked and disappointed that government has not made a decision on the future of e-tolls, adding the government has been misleading the public on when it will make an announcement.

Duvenage said Outa remains confident that e-tolls will be scrapped.

“If you read between the lines in the budget review, there was no comment that the user-pay principle must stay and it says declining e-toll revenue will be offset by other measures.

“Those are the precursors to not forcing the issue anymore,” says Duvenage.

“They have stopped trying to issue summonses [for e-toll non-payment],” he said.

Duvenage said the rhetoric by Mboweni about e-tolls has also toned down since the medium-term budget policy statement in October last year, when Mboweni was gung-ho when talking about the user-pay principle and e-tolls.

Duvenage also highlighted that Sanral has been allocated R1.9 billion in the budget to compensate for reduced tariffs on the GFIP and the government over the years has effectively been financing the repayment of the R20 billion bond to finance the project through allocations from taxes.

“The solution is to continue to fund it as they have been doing,” he said.

AA also still hoping

Layton Beard, a spokesperson for the Automobile Association (AA), said it was expecting an announcement by government on the future of e-tolls by the end of August last year and hopes an announcement is made soon.

Beard said the AA believes that cabinet has certainly applied its mind to the future of the scheme but does not know to what extent it has finalised its deliberations.

“We are disappointed that we don’t know what the situation is. At some point a decision has to be made,” he said.

Contract extensions

Sanral in November extended the e-toll management contract awarded to Electronic Tolling Company’s (ETC) for the GFIP, for a further three months.

This followed Sanral in August issuing a new tender for the management of the open road tolling system on GFIP, but stressing that only part of the tender related to e-tolls on GFIP.

It said part of the tender issued related to a national Transaction Clearing House (THC) and a violations processing centre.

Vusi Mona, the communications general manager at Sanral, told Moneyweb this week that this tender has not yet been awarded and is “still in process with detail clarification and verification of information submitted by the various bidders”.

The three-month extension to ETC’s contract in December expires early next month but Mona said the original contract approved permitted an up to two-year extension option from December 2019.

Mona added that Sanral’s board has not made any decision yet to further extend ETC’s contract.

“The board meeting is scheduled to discuss the verification report, and the outcome of the meeting will determine if further extension is required and for how long.”