Reducing e-toll tariffs makes matters worse — Outa
Reducing e-toll tariffs in the hope that compliance and revenue will increase won't rectify the dismal e-toll revenue situation and makes matters worse, says the Organisation Undoing Tax Abuse (Outa).
What is needed is to abolish the e-tolls and seek alternative funding for the Sanral debts, says Wayne Duvenage, CEO of Outa.
On Sunday, City Press and TimesLive reported that the Cabinet’s task team planned to submit seven proposals to Cabinet to resolve the e-toll crisis, including discounting e-tolls by 70%.
In July, transport minister Fikile Mbalula was mandated by President Cyril Ramphosa to work with finance minister Tito Mboweni and Gauteng Premier David Makhura to find a solution to the e-toll problem by the end of August.
The team has reportedly failed to find common ground on the matter, leaving Cabinet to be the final arbiter.
Outa was one of the parties that met with Mbalula in Pretoria to discuss solutions, but rejects reduced e-toll tariffs as a solution to pay for the GFIP (Gauteng Freeway Improvement Project).
“Current compliance levels are about 20%, today bringing in just R55m a month, which is a shortfall of almost R250m per month. Even if there is 100% compliance by motorists with a 70% discount, this isn’t going to bring Sanral much more revenue,” says Duvenage.
Sunday’s report also suggested that e-tolls could be discounted to 10c per gantry but Duvenage says this suggestion is likely inaccurate, as this would reduce the tariff to just 3% of the current R3 per gantry.
“Reducing the toll tariffs or reversing past debt to entice the public to come on board will never resolve the GFIP bond payment problem,” says Duvenage. “Our view is the scheme should be scrapped.”
Sanral tried reducing tariffs in 2015 by offering a 60% discount on outstanding debt, just two years after the scheme started operating. All this discount did was raise 2% of the outstanding debt while compliance levels continued to decline, says Outa.
“The Gauteng e-toll project is the most expensive and inefficient scheme in the world and will never achieve its intended aims of financing the overpriced Gauteng freeway upgrade,” says Duvenage.
Most South Africans view the e-tolls system as corrupt, a study by the Automobile Association (AA) recently found. The Road Funding Report revealed through a survey that motorists showed a negative attitude towards Sanral, which made it unlikely that more people would be convinced to comply.
The e-tolling system has experienced enormous public backlash since its 2013 implementation.
Both the AA and Outa are in favour of the fuel levy payment method, which would mean an increase in the fuel price. Outa suggested a possible hybrid of the fuel levy which may be supported partially by an inland fuel levy.