E-toll debt is no reason to hold onto a failed scheme
The Organisation Undoing Tax Abuse (OUTA) suggests that Finance Minister Enoch Godongwana waives all outstanding e-toll debt.
Godongwana was reported as telling a meeting of ANC leaders that difficult trade offs would be required to fund the party’s R73.5 billion wish list, that one of the financial challenges was that R4.6bn would be needed to cover Gauteng’s unpaid e-tolls and that he cautioned against forgiving this debt.
OUTA contends that the state has no other option but to face reality and waive this debt as uncollectable, after years of motorists defying an irrational and grossly inefficient scheme.
“The state continues to make this mistake on the e-toll debacle and must surely realise after seven years of failure that raising and clinging to unjustified debt from a defiant public is a lost cause,” says Wayne Duvenage, OUTA’s CEO.
“In March 2019, Sanral’s board resolved to stop pursuing e-toll debt. Sanral has also halted its court challenge against OUTA, which they had set out to force e-toll defaulters to pay. Essentially, they have no enforcement mechanism available to retrieve the outstanding e-toll debt.”
Sanral has already effectively written off R17.3 billion of e-toll debt which it was forced to reflect as unrecognised revenue since the e-toll scheme began in December 2013, and has impaired a further R6.3bn e-toll debt. Furthermore, Treasury has allocated grants of R10.8bn to Sanral since 2016 to cover the Gauteng Freeway Improvement Project (GFIP) debt, which reflects that the state has resigned itself to having no option but to settle what was an expensive mistake, courtesy of poor judgment by Sanral at the time.
Aside from the e-toll debt comment, based on what was reported, there is merit in much of Minister Godongwana’s approach to other aspects which need to be tackled such as: retrenchment within the public sector to cover the burgeoning wage bill; the move to generate power from renewable resources; and an overhaul of the allocation of work permits to address our skills shortage in South Africa.
Since July 2019, Cabinet has been promising us a solution to the e-tolls impasse, but the self-imposed deadlines repeatedly pass by. OUTA calls on Minister Godongwana to help resolve the Cabinet’s stalemate and engage with OUTA to understand alternative solutions posed.
This decision is more urgent than ever, as Sanral’s final contract extension with e-toll collections agency ETC expires on 2 December 2021. Sanral has extended this several times, although this has been legally questionable.
A soundclip with comment from OUTA CEO Wayne Duvenage is here.
More on OUTA's campaign against e-tolls is here.