Gauteng e-toll system to cease, taxpayers to shoulder debt burden

As of April 12, 2024, the e-toll system in Gauteng will cease, yet taxpayers face footing the bill for its debt. A governmental accord mandates National Treasury to cover 70% of Sanral’s R43-billion debt, funded by taxpayer money. The remaining 30% falls to the Gauteng Provincial Government, coupled with a R4.1 billion backlog maintenance obligation. Despite concerns, the province aims to secure loans for payment, banking on expanded revenue streams. The fate of historical e-toll debts remains uncertain.

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By Hanno Labuschagne

While the e-toll system in Gauteng will officially be shut down from 12 April 2024, taxpayers will ultimately be covering at least a portion of the outstanding debt on the project.

The official government gazette that scrapped e-tolls only came after an agreement between National Treasury and the Gauteng Provincial Government.

Under this deal, National Treasury will pay 70% of the South African National Roads Agency’s (Sanral’s) outstanding R43-billion debt on the project — around R30.1 billion.

Treasury’s income is derived directly from taxes paid in the country, over a third of which is contributed by personal income tax on salaries and other earnings.

Other significant contributors include company income tax, VAT, and customs import duties.

Effectively, the R30.1 billion being paid to Sanral is a bailout funded with taxpayer money.

The remaining 30% of the Sanral debt, amounting to about R12.93 billion, will be paid by the Gauteng Provincial Government (GPG).

In addition, the province must pay a further R4.1 billion to Sanral for backlog maintenance conducted on roads that formed part of the GFIP.

During his budget speech in February 2024, Gauteng Treasury MEC Jacob Mamabolo said that the province’s contribution would be funded by a loan or loans from financial institutions, which the government said it was confident it would have secured by the end of March 2024.

The GPG gets most of its revenue from provincial taxes, primarily vehicle licencing fees. Other revenue sources include gambling, betting, and excise taxes.

In its most recent budget, R2 billion to R3 billion of revenue allocated to the payment of the loans was “pencilled in” from hypothetical additional revenue from these sources.

Mamabolo said this would be possible due to the government expanding its footprint of motor vehicle licence renewal locations.

“We can look at what we can get from the gambling board as extra resources,” Mamabolo said.

The Democratic Alliance (DA) expressed concern over the GPG committing to taking over the e-toll debt without finances being in place.

There was also no confirmation of whether historical e-toll debt would be cancelled, or if those who had paid their e-tolls would be refunded, as was previously promised by Gauteng Premier Panyaza Lesufi.

Panyaza Lesufi, Premier of Gauteng

The DA said it would fight against any option that intends to add financial burden to Gauteng residents.

In addition to provincially-raised taxes, half of the National Treasury’s nationally-raised taxes are distributed to Gauteng and the other eight provinces, with allocations based on their demographic and economic profiles.

Gauteng typically receives the most. With last year’s budget, it was allocated R143 billion of the R660 billion earmarked for provinces.

Regardless of whether the province plans to continue pursuing e-toll debts, which would be risky given motorists’ defiance of the system over the past decade, taxpayer money will go into settling the debt.

MyBroadband asked the Gauteng Provincial Government, National Treasury, and Sanral for more detail on how the historical e-toll debt will be handled.

Sanral was the only entity to respond by the time of publication but said it would not make any further comment at this stage.

“A media briefing will be held in the coming days to provide clarity on the way forward,” the agency said.