SANRAL faces no pressure without tolling

While the current legal proceedings between The Opposition to Urban Tolling Alliance (OUTA) and SANRAL will determine the ability of e-tolls to proceed or not, the current discussions between various stakeholders and the GFIP Inter Ministerial Committee (IMC) has expressed an intent to look at a number of alternative funding initiatives which does exclusively rely on e-tolls.

Indeed all parties during the recent stakeholder’s discussions which OUTA has attended, led by the Deputy President Kgalema Motlanthe, concede that the current priority is to identify some short term funding mechanism which will assist SANRAL’s immediate cash flow requirements and debt obligations while a more robust and sustainable funding model is agreed by all stakeholders. This would protect the current reserves for the much needed planned road infrastructure improvements. OUTA has voiced, similar to many other associations, a strong motivation for the national Fuel Levy to be considered as an efficient and effective funding mechanism.

Furthermore, there is a question as to whether the R5,8bn tranche provided by Treasury earlier this year is part of the R7bn reserve or not. Secondly, at the e-tolling court hearings in April 2012, SANRAL’s counsel argued hard and long that if e-tolling was interdicted and did not commence soonest, this would have dire consequences for the organisation. These apocalyptic predictions by SANRAL and Treasury have not materialised three months later and Moody’s report confirms that with over a year to go, there is time to find alternative funding solutions.

OUTA along with other organisations have suggested for some time now, that the national Fuel Levy could be adjusted up by 10 cents to provide SANRAL with the cash flow required to begin settling the GFIP debt now. That way it would save the Gauteng motorist in excess of R1,7bn per annum on wasted toll collection and administration costs. While the authorities talk of seeking to find an amicable solution to this quandary with various stakeholders through the inter-ministerial committee meetings, it would appear that the matter will have to be heard in the court at great expense to the taxpayer.

We hope that Moody’s will consider the significant benefits that the implementation of an additional levy (or similar type mechanism) on fuel will have on SANRAL’s funding requirements and not determine the fate of this entity on the basis of whether e-tolling proceeds or not.