Outa is keeping ‘the champagne on ice’ for final e-toll decision

The Organisation Undoing Tax Abuse (Outa) says it will keep “the champagne on ice” until there is a final decision on the scrapping of e-tolls on the Gauteng Freeway Improvement Project (GFIP), stressing that the decision to scrap e-tolls is not final until enacted.

The Automobile Association (AA), which has consistently been calling for the scrapping of e-tolls since they were introduced, has also been guarded in its reaction to comments by Transport Minister Fikile Mbalula about the scrapping of e-tolls on the GFIP.

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Outa CEO Wayne Duvenage said on Monday the organisation has noted the article published by Moneyweb, which stated that cabinet has made a decision to scrap e-tolls.

Read: Government to finally scrap e-tolls on GFIP

“While on the face of it this is a welcome and long overdue decision, the decision to reverse the toll road declaration for Gauteng freeways requires formal enactment in law.

“Until this happens, this statement must be taken as rhetoric,” he stressed.

AA also waiting for confirmation

AA spokesperson Layton Beard said the association will also wait for the official announcement on the decision to scrap e-tolls.

“The decision to scrap [e-tolls] is not final until cabinet has made a final decision.

“We are waiting, as is everybody else, for the announcement in the budget speech for the official word or either something from cabinet or something official earlier that says this is the way forward.

“We welcome the fact that we may see a scrapping of the system because that is something we obviously wanted but, like everybody else, we will wait for the official announcement to come through,” he said.

The unofficial announcement

This follows Moneyweb reporting on Monday that Mbalula said during a Friday briefing that cabinet had taken a decision to scrap e-tolls, but when this decision was supposed to be implemented “Treasury said ‘no wait’”.

Mbalula added that the nine options for the future of e-tolls that were presented to the cabinet in 2019 had been reduced.

“We are looking at the scrapping and the implications. That is the option we are looking at,” he said.

Mbalula said an announcement on e-tolls will be made at the latest by Minister of Finance Enoch Godongwana in his budget speech (in February).

‘Cheapest option’

Outa said scrapping the e-toll scheme is the cheapest option, because none of the current e-toll funds are being allocated to the GFIP bonds and there aren’t any penalties if the scheme is cancelled.

The organisation said the state has already been funding the GFIP bonds through National Treasury’s tax allocations, which was the proposal made by Outa from the outset of the freeway upgrade.

In addition, Outa said Treasury has already increased the fuel levy well above Outa’s suggested amount of 10c per litre of petrol since 2008, which means the funds already exist within Treasury’s coffers to make allocations to the South African National Roads Agency (Sanral) to pay for the GFIP bonds “as it has been doing for the past six years”.

Duvenage said Outa is urging the state to do less talking and make its decision final by reversing the declaration of Gauteng freeways as tolled roads.

“Until then, the public cannot regard the e-toll scheme as being scrapped.

“For now, we shall keep the champagne on ice,” he said.

Payment compliance

Beard said the AA maintains its stance that motorists who continued to pay their e-tolls must be reimbursed.

The payment compliance rate was below 19% in 2019 when President Cyril Ramaphosa appointed Mbalula to head a task team, which included then finance minister Tito Mboweni and Gauteng premier David Makhura, to report by August 2019 on the options available for the future of e-tolls.

“If the fuel levy is being looked at as a possible solution, our view is that ‘let’s not increase the fuel levy but let’s take a portion of the fuel levy and use that towards e-tolls’,” he said.

Mbalula said on Friday the government is currently considering how the scrapping of e-tolls will affect the future financing of road infrastructure and is looking at different models to finance this infrastructure in the future. He admitted that the fuel levy has been on the agenda.

He said both Outa and trade union federation Cosatu have been in favour of using the fuel levy to fund the repayment of GFIP bonds, but National Treasury had ruled this out because it will not be sustainable.

Source: moneyweb.co.za