E-tolls: the fate of the Gauteng motorist

Almost eight years on and the impasse around e-tolls and the associated debt for Gauteng motorists rages on. After an initiative led by President Cyril Ramaphosa to resolve the matter, the South African National Roads Agency (Sanral) announced Wednesday that the process of pursuing e-toll debt will be suspended.  This decision was heavily criticised by Finance Minister Tito Mboweni on Thursday, and in a move that seems to be directly opposed to the ANC, he demanded that it should be retracted.

But what does this suspension mean for the motorist and the R10.9 billion in historic unpaid e-toll debt? Justmoney explores.

2019 started with the news that Sanral was adjusting toll rates in line with the Consumer Price Index (CPI) and VAT increase that came into effect on 1 March 2019.

However, this  was met with concern as the controversial e-tolling system has received incessant backlash by the Organisation Against Tax Abuse (OUTA) and motorists alike.

The greatest issue was that in addition to the growing historical debt which Sanral was addressing with legal action, motorists will only struggle more financially, given the expensive and increasing cost of living.

The announcement

But Tuesday saw the suspension of e-toll debt collection, including historical debt, with immediate effect.

“This announcement does not mean that e-tolls and debt will be scrapped. Secondly, consumers should remember that this suspension is specific to Gauteng motorists,” says Automobile Association spokesperson Layton Beard.

Sanral says that the decision to suspend is temporary, and that its board is determined to get the whole e-toll matter resolved urgently.

“There has been no scrapping of e-toll debt, but just the suspension of the mechanism of summonses, while the government’s processes are being determined. Should circumstances unfold to return to the option of issuing summonses, the board will reinstate it. The board urges continued and timely payment of e-tolls and e-toll debt,” says Sanral.

The Organisation Against Tax Abuse (OUTA) weighs in as well, as chief executive officer Wayne Duvenhage says: “As much as debt collection has been suspended, the courts don't go into “suspension” mode as they have strict rules and procedures to follow when it comes to the timing of responses to summonses within 20 days etc. Thus, we remind motorists not to ignore summonses and to contact OUTA for advice.”

This suspension will also not affect the year-on-year tolling rate increase, meaning those who continue to pay, will be charged more.

Another consideration is around the supposed blacklisting of motorists who have debt owing.

To this Beard says: “This is incorrect. Sanral has never offered credit and for this reason defaulters’ names cannot be blacklisted at any credit bureaus.”

Is this a step closer to scrapping e-tolling in Gauteng?

“While there are roads in South Africa where tolling is working, the tolling system in Gauteng isn’t. According to Sanral statistics 70% of motorists who have debt owing refuse to pay,” Beard says.

While Sanral has refrained from commenting on whether it signals the end of the tolling system in the City of Gold, it reiterated that this system was never meant to increase the financial burden on the consumer.

According to Sanral, e-tolls are affordable. In an e-mail interview Sanral states that its data shows that approximately 78% of light vehicle users would pay less than R100 per month, if compliant, based on the 2013 rates. 

“If this number is escalated (and please note that CPI adjustments were not made for the Gauteng Freeway Improvement Project (GFIP) during the initial years of the project), these 78% of users’ total spend on e-toll for the period up to end of February 2019 would have amounted to approximately R7 600 for the total period,” Sanral says.

If a road user was part of the few (6%) light vehicle users that travelled extensively on the freeway network and reached the cap every month since inception of the GFIP, and was compliant, the maximum toll payable from 3 December 2013 to end February 2019 amounted to less than R21 000.

“It is unfortunate that detractors of the GFIP encouraged people to end up in debt. That was not of Sanral’s doing. The e-toll tariffs were made affordable by the government following various interventions. However, there is an additional financial burden on government to summon non-compliant users. These costs cannot be carried by compliant users or tax payers,” says Sanral.

The conversation that follows

“There are three questions and conversations that need to be had,” says Beard.

 “Firstly: what if I was part of the 30% that was paying, and will I be refunded should the Gauteng tolling initiative be scrapped? Secondly, will this dissuade the 30% to stop paying their toll debt? And thirdly - will this debt eventually be carried by the taxpayer?”

While there are no definitive answers to these questions yet, Sanral is of the opinion that the real focus should be on the development of the country’s road infrastructure rather than on e-tolling.

 “It is unfortunate that the question is always focussed on e-tolling, rather than the real issue – the sustained provision of the required freeway network for Gauteng residents to grow the economy. E-tolling was/is merely the mechanism to obtain sustainable revenue.”

As a result of poor debt collection, the GFIP was funded through the capital markets as part of Sanral’s toll portfolio. These loans are paid back by using the collected toll fees. This means that if these funds are not collected, the debt cannot be serviced. Therefore, Sanral required assistance from Treasury in order to service loans and for the maintenance and operations of these roads.

“The real cost in terms of time and growth is much higher. Commuters and road users will increasingly start to experience the impact through traffic congestion, lower productivity and resulting slower business growth. The important questions now, are not about the number of summonses served or the legal ways in which outstanding debt can be collected, but how the broader road infrastructure and mobility needs in Gauteng can be addressed when the planned funding through the collection of tolls is being impeded,” Sanral says.

While motorists can temporarily breathe a sigh of relief as the administrative cracks begin to show, their fate is still undecided.