Minister Nzimande is confused on e-toll funding

The Organisation Undoing Tax Abuse (OUTA) is concerned about Minister Blade Nzimande’s comments that e-tolls are now required to pay for SANRAL’s debt.

The Minister was speaking on SABC News on Thursday evening.

“In March, Minister Nzimande indicated that the ‘disastrous e-tolls’ scheme could no longer be dragged out and a solution needed to be considered by Cabinet,” says Rudie Heyneke, OUTA’s Transport Portfolio Manager.

Now the Minister is reluctant to pull the plug on the e-tolls scheme as he wants this to pay for R67bn of roads built by SANRAL.

“The Minister appears to be either confused or misinformed, because the bonds obtained from the Public Investment Corporation for the Gauteng Freeway Improvement Project (GFIP) amounted to R20bn and the Gauteng e-tolls cannot be used to fund borrowing for other roads,” says Heyneke.

On 29 November 2017, the then Minister Joe Maswanganyi told Parliament that the debt was up to R48bn, according to Hansard.

How did this rocket by R19bn to R67bn in nine months?

Recently the DDG of Public Finance in the National Treasury, Dr Mampho Modise, was reported by the Mail & Guardian to have told Parliament that SANRAL was hampered in its ability to finance the maintenance of non-toll roads as a result of its inability to raise funds from e-tolls, and that the enforcement of a decision by Government on e-tolls was needed.

What the Minister does not appear to understand is that the failed e-toll scheme has a compliance rate of around 25% and very little, if any, of these collections are funding the e-toll bonds.

Instead, the e-toll revenues are merely funding the operational collection costs of the scheme.

“Why keep the scheme alive, if it is having no effect on generating revenue to ease SANRAL’s funding plight and, on top of that, SANRAL continues to wage a legal war with Gauteng residents by issuing thousands of summonses against e-toll defaulters?” says Wayne Duvenage, OUTA’s CEO.

On 17 August, the Minister said in a written reply to Parliament (RNW2133) that SANRAL was pursuing 6 071 cases in the magistrate’s courts and high courts in relation to outstanding e-tolls. The legal costs were not specified. OUTA’s lawyers are assisting in the defence of 1 028 of these cases.