Mboweni says e-tolls here to stay; Outa vows to fight on

Finance minister Tito Mboweni gave no wiggle room for those looking to get out of paying their e-tolls bill.

He reiterated that government has decided to retain the user-pay principle and e-tolls on the Gauteng Freeway Improvement Project (GFIP) in his medium-term budget policy statement speech on Wednesday.

Strengthening e-toll payment compliance by motorists using the GFIP may, however, be the Achilles heel of government’s attempts to make the scheme work.

Mboweni urged motorists to pay their e-tolls, adding that there would be a further dispensation and value-added services while compliance would also be strengthened.

However, Wayne Duvenage, chief executive of the Organisation Undoing Tax Abuse (Outa), is uncertain how the government will enforce greater compliance when there are still outstanding court cases related to the implementation of e-tolls.

Duvenage said Outa has no intention of giving in on the e-tolls issue.

“The test case that has been developed over the past two years has been abandoned, or placed on hold for the past eight months by Sanral. The court case is in the way and it has to happen. I think they are going to try some more carrot-and-stick approaches.

“They have tried them before with 60% discounts and threatened people with criminal records and their licences being withheld, they have summonsed people, they have threatened people with judgments — but nothing has worked,” he said.

‘Sanity doesn’t seem to prevail’

Duvenage added that Outa had heard government in the past saying it would write off all the debt, provided motorists started paying now. He said this might push up compliance from 20% to 30% or maybe 40% but that it would fail again over time. “Sanity doesn’t seem to prevail.”

He said Outa is also worried by government’s determination to cling to the myth that the e-toll scheme is an efficient user-pay financial solution to settle the freeway upgrade bonds, when it was a failed user-pay scheme, it was not efficient, and it was fraught with corruption.

The Automobile Association in August reported that research it conducted revealed that more than 52% of motorists believe there is nothing government could do to convince them to start paying their e-tolls on the GFIP.

The association said 78% of motorists cited government corruption as the reason for deciding not to pay their e-tolls.

Duvenage said the reality is that e-toll compliance is at an all-time low of 20%. He said it will be interesting to see how government proposes to address this, because it has failed to do so for the past six years.

“Why is it so important for them to cling to a system that is the most expensive scheme in the world, which reeks of corruption from the road upgrade to the ETC (Electronic Tolling Company) contract, whose profits enrich a foreign company?

The AA on Wednesday said it was disheartened by Mboweni’s announcement that e-tolls are “here to stay”.

It said Mboweni mentioned that government had considered several options, but decided to retain the user-pays principle.

“We have data that indicates users will continue not to pay, and that the system is doomed to failure should it be kept in its current format. Compliance rates are lower than 30%, well below any accepted threshold for success. When we met the minister of transport in August, we also noted that any amount of cajoling or threats of legal action would not convince non-payers to change their minds.”

When it released its annual financial results last month, Sanral reported that low payment rates by motorists resulted in revenue it received from e-tolls on the GFIP slumping 63% to R687.7-million in the year to March, from R1.9-billion in the previous year.

The roads agency also raised an impairment of R10-billion on its total e-toll trade and other receivables of R11-billion at end-March.

Auditor-general Kimi Makwetu confirmed this was the value of expected credit losses by Sanral’s e-toll trade and other receivables at the end of its financial year.

• This article was originally published on Moneyweb and is used here with permission