Government misleads public on e-toll decision, yet again

SANRAL extends collection contract after months of Cabinet indecision.

13/03/2020 10:07:02

                                                                                                                                                                                                                      Government misleads public on e-toll decision, yet again



                                                                                                                                                                                                                      Despite numerous undertakings by the Executive that a decision on e-tolls and Gauteng Freeway Improvement Project (GFIP) funding will be made, society has again been let down.
                                                                                                                                                                                                                       
                                                                                                                                                                                                                      On 10 July 2019, Cabinet mandated Transport Minister Fikile Mbalula, Finance Minister Tito Mboweni and Gauteng Premier David Makhura, to come up with a solution to address the e-toll impasse. Cabinet said that, on the basis of various proposals, a decision would be announced two weeks later. Since then, 12 Cabinet meetings have taken place (the latest on 11 March 2020) and we still await a decision.
                                                                                                                                                                                                                       
                                                                                                                                                                                                                      Government’s indecisiveness has led to SANRAL extending the e-toll collection contract with Electronic Toll Collections (ETC) until December 2020, sending a clear message that, contrary to earlier statements, it is in no hurry to make this decision.
                                                                                                                                                                                                                       
                                                                                                                                                                                                                      “This is a clear indication that the rhetoric about reaching a final decision on e-tolls in the lead up to the 2019 elections was a farce,” says Wayne Duvenage, OUTA’s CEO. “Our authorities are simply entrenching their status of having the lowest levels of public trust in their government, as is reflected in the Edelman Trust Barometer of 2020.”
                                                                                                                                                                                                                       
                                                                                                                                                                                                                      E-toll compliance has dropped to its lowest levels of around 20%. This level of compliance merely keeps the collection scheme on life support, as a result of payments trickling in from the last remaining compliant motorists and businesses – some of whom profit from the administration fees when passing on the e-toll charges to their customers.
                                                                                                                                                                                                                       
                                                                                                                                                                                                                      Important to note is that National Treasury does allocate around R1.9 billion of tax collections to SANRAL each year, specifically to cover the e-toll shortfall. This is roughly the amount needed to fund the GFIP bonds and therefore begs the question: what exactly is the purpose of the R50 million being recouped from the 20% compliant e-toll users each month?
                                                                                                                                                                                                                       
                                                                                                                                                                                                                      “What we do know is that if the one-in-five compliant people stopped paying their e-toll bills, government would be compelled to finally make the decision, or be forced to bail-out the ETC company for its operations costs, which they will be very reluctant to do,” says Duvenage.

                                                                                                                                                                                                                      A timeline of e-toll indecision 


                                                                                                                                                                                                                      • On 26 March 2019, SANRAL decided at a board meeting that it would no longer pursue criminal action against motorists with outstanding e-toll debt.

                                                                                                                                                                                                                      • On 10 July 2019, Cabinet held a meeting and announced that President Cyril Ramaphosa had mandated Transport Minister Fikile Mbalula, Finance Minister Tito Mboweni and Gauteng Premier David Makhura “to find a solution of the e-tolling on Gauteng freeways”, that consultations would be held within government and “workable outcomes” would be presented to Cabinet by the end of August 2019.

                                                                                                                                                                                                                      • Further cabinet meetings on 24 July, 8 August and 21 August did not result in decisions.

                                                                                                                                                                                                                      • On 8 August 2019, SANRAL advertised a tender for a new six-year contract to collect e-tolls. This was in reaction to the fact that the existing contract, with Electronic Toll Collections (ETC), was about to expire on 2 December 2019.

                                                                                                                                                                                                                      • On 28 August 2019, OUTA met Minister Mbalula to share its view and extensive research on the e-toll impasse and discuss solutions. OUTA also presented its input in a 60-page e-toll position paper, Getting Beyond the E-toll Impasse.  Minister Mbalula said further meetings would be held with other stakeholders, indicating the August deadline for the solutions to the impasse – as tasked by the President – would not be met. 

                                                                                                                                                                                                                      • Further cabinet meetings were held on 4 September, 18 September and 16 October 2019, and still no decision on the e-toll matter was announced.

                                                                                                                                                                                                                      • On 30 October 2019, Cabinet held a meeting but no e-toll decision was made. However, Minister Mbalula said that Cabinet was considering various options and a decision would be made in two weeks.  Gauteng Premier David Makhura said he was confident a solution was imminent.

                                                                                                                                                                                                                      • On 30 October 2019, Minister Mboweni said this in his Mid-Term Budget Policy Statement speech: “Cabinet has considered several options to resolve the impasse over the Gauteng Freeway Improvement Project. The reconfigured approach to Gauteng Freeway Improvement Project and its financing will be determined by the Ministers of Finance and Transport after consultation with the Premier of Gauteng and his Executive council. We need to build a culture of payment, as government services can only be sustainable if all of us that can pay for services, do so.” 

                                                                                                                                                                                                                      • On 12 November 2019, OUTA sent a message to the Cabinet reiterating the need to scrap the e-tolls. See here

                                                                                                                                                                                                                      • On 20 November 2019, Cabinet held a meeting and still no decision on the e-toll matter was announced. 

                                                                                                                                                                                                                      • On 5 December 2019, SANRAL extended its expired e-toll collection contract with ETC for three months (see here), pending either a decision to scrap the e-toll scheme or the finalisation of a new e-toll tender for the new five-year contract (see here).

                                                                                                                                                                                                                      • On 13 December 2019, Cabinet held a meeting, said it had noted its ministers' report on e-tolls and a “final decision” on the recommendations would be made “in the New Year”. 

                                                                                                                                                                                                                      • On 17 December 2019, Minister in the Presidency Jackson Mthembu said the decision would be made at the next Cabinet meeting in the New Year. “It will definitely be finalised at the next Cabinet meeting. I can put my head on the block,” said Mthembu

                                                                                                                                                                                                                      • On 31 January 2020, Cabinet ended a three-day lekgotla. At the end of it, there was still no e-toll decision. 

                                                                                                                                                                                                                      • On 12 February 2020, Cabinet held a meeting but there was no e-toll decision.

                                                                                                                                                                                                                      • On 13 February 2020, President Ramaphosa’s State of the Nation Address didn’t mention e-tolls. 

                                                                                                                                                                                                                      • On 25 February 2020, Premier Makhura said in his State of the Province Address: “As the Executive Council, we made a strong and persuasive case to national government on the e-tolls. I have been assured by President Cyril Ramaphosa that a lasting solution has been found and an announcement by the President is imminent.” 

                                                                                                                                                                                                                      • On 26 February 2020, Minister Mboweni’s Budget referred to the declining revenue from e-tolls as one of the risks to the fiscal outlook. The Budget Review said clarity was needed on the e-tolls. “Declining e-toll revenue will have to be offset by other measures to repay South African National Roads Agency Limited debt. It could also affect funding for other investment projects.”

                                                                                                                                                                                                                      • On 11 March 2020, the Cabinet held a meeting and yet again, there was no e-toll decision.

                                                                                                                                                                                                                      OUTA is a proudly South African civil action organisation, that is purely crowd funded. Our work is supported by ordinary citizens who are passionate about holding government accountable and ensuring our taxes are used to the benefit of all South Africans.