Still no clarity on the future of e-tolls

Government still has to make a decision on the future of e-tolls. finance minister Tito Mboweni failed to mention e-tolls in his budget speech on Wednesday and there were only two sentences in the budget review that specifically mentioned them.

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 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 spokeswoman Ayanda-Allie Paine said on Wednesday the department is waiting for cabinet to make a decision on e-tolls, “so we can announce what they have agreed on”.

Wayne Duvenage, CEO of the Organisation Undoing Tax Abuse (Outa), said he 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. They have stopped trying to issue summonses (for e-toll non-payment).”

Rhetoric

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 the minister was gung-ho when talking about the user-pays principle and e-tolls.

The Outa boss also highlighted that Sanral has been allocated R1.9-billion in the budget to compensate for reduced tariffs from Gauteng e-tolls 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.

Layton Beard, spokesman for the Automobile Association, 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. He said the AA believes that cabinet has 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.

Sanral in November extended the e-toll management contract awarded to Electronic Tolling Company (ETC) for the Gauteng freeways, for a further three months. This followed Sanral in August issuing a new tender for the management of the open-road tolling system in Gauteng, but stressing that only part of the tender related to e-tolls on the roads.

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

‘Still in process’

Vusi Mona, the communications GM at Sanral, said 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.”

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