Mbalula promises announcement on alternative funding to Gauteng e-tolls — again

Transport minister Fikile Mbalula has again promised an announcement on an alternative funding solution to e-tolls for Gauteng freeways, this time in the October medium term budget policy statement (MTBPS).

The decision, promised since July 2019 but still awaited, is expected to formally scrap the e-toll scheme and announce an alternative funding solution for the Gauteng Freeway Improvement Project (GFIP).

This came four months after the SA National Roads Agency Limited (Sanral) board passed a resolution in March 2022 stating it will no longer pursue criminal action against motorists with outstanding e-toll debt.

“We are aware that the e-toll decision has already been made by cabinet, which has been commented on by the minister several times since last year,” said Wayne Duvenage, CEO of the Organisation Undoing Tax Abuse (Outa).

“We are also aware that this decision would most likely have involved an increase in the fuel levy to generate the necessary revenue to pay for the maturing GFIP bonds as was confirmed by the minister. However, the fuel levy option they had planned has become a headache in today's environment of soaring fuel prices. That horse has now bolted.

“Outa will never endorse an increase in the fuel levy at this late stage to cover the GFIP bonds. The option of a 10c increase in the fuel levy was proposed by us in 2011 when the fuel levy was R1.78/l  and was viable back then.

“Had they followed our advice and allocated the additional R2.2bn raised per annum from a 10c fuel levy increase to the GFIP bonds the R18bn borrowed for the overpriced freeway upgrade would have been settled by now.”

National Treasury has increased the general fuel levy by R2.07/l since 2011 and has already allocated an additional R14bn over the past six years to Sanral for the GFIP bonds. This funding by government is what Outa has repeatedly suggested.

“There is no reason for government to continue procrastinating on the e-toll decision. The scheme should be scrapped as soon as possible to free up unnecessary administration costs allocated to the scheme,” said Duvenage.

“This would also provide relief for the last 15% of users who continue to pay.”

In August 2019, a month after cabinet announced it was looking for alternative funding for the GFIP, Outa made a submission to the minister of transport motivating for e-tolls to be scrapped and alternative funding arranged.

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