Lesufi backtracks on e-tolls refund plans

The scrapping of the controversial e-toll system on the Gauteng Freeway Improvement Project (GFIP) is slowly edging closer.

Gauteng Premier Panyaza Lesufi said National Treasury, the South African National Roads Agency (Sanral) and the Gauteng Provincial Government are at the “tail end” of the process, but backtracked on reported comments he previously made about refunding motorists who had diligently paid their e-toll accounts.

R6.9 billion e-toll refund?

702 Eyewitness News reported in January that Lesufi had confirmed that almost R6.9 billion would be refunded to motorists who have been paying for e-tolls on the GFIP.

However, in an exclusive interview with Moneyweb this week on the sidelines of the 2023 Smarter Mobility Africa Summit in Midrand, Lesufi denied saying that motorists who had paid their e-toll would be refunded.

“I didn’t say that. I said it’s one of the issues that needs to be discussed. I said payment of the [Sanral GFIP] debt and the issue of those who have paid are matters that need to be resolved, and it’s on the agenda [for discussion],” he said.

ALSO READ: Sanral considers new tolls

Asked if this meant motorists who had paid their GFIP e-toll accounts would now not necessarily be refunded, Lesufi said: “Let’s resolve one outstanding matter, then we will come back to you.

“We have spent the last nine months on these issues. At least we are now left with one. We will resolve it.”

‘Pie in the sky’

Organisation Undoing Tax Abuse (Outa) CEO Wayne Duvenage said Lesufi made it very clear in his statement in November 2022 that the provincial government would refund those who had paid R6.8 billion in e-tolls.

“You don’t make comments and statements in November 2022 about what you are going to do and that by December 31 2022, you will turn e-tolls off without having these issues resolved.

“So nine months later, what you [Lesufi] were saying then was pie in the sky, and it remains pie in the sky,” he said.

ALSO READ: ‘It’s not really over’ – Lack of clarity on closure of e-tolls raises concerns

Lesufi said he could not comment on the nature of the four points of difference because “they have clamped me if I speak before we conclude”.

“We have put a technical team together to resolve the last outstanding matter, and hopefully we will,” he added.

“But I’m even scared to say by when because I’ve made deadlines [statements] before. But I’m glad we are only left with one item.”

Whose responsibility is it anyway?

Lesufi said the Gauteng Provincial Government decided to take over responsibility for GFIP national roads, which is normally Sanral’s responsibility because, if it did not, the debt would keep ballooning without there being any way to stop it.

He confirmed that among the five issues they had been working on was the possibility of responsibility for the GFIP national roads being transferred back to Sanral sometime in the future and an additional allocation to the Gauteng Provincial Government from National Treasury to manage and maintain the GFIP national roads.

The negotiations over the scrapping of the GFIP e-tolls follows Finance Minister Enoch Godongwana stating in his Medium Term Budget Policy Statement (MTBPS) speech in October 2022 that to resolve the funding impasse over the GFIP e-toll scheme, the Gauteng Provincial Government had agreed to contribute 30% to settling Sanral’s GFIP debt and interest obligations, while national government covers 70%.

ALSO READ: Your e-toll debt might not be written off after all

Lesufi subsequently confirmed in November 2022 that the total amount to be paid by the provincial government was R12.9 billion – 30% of R43 billion – using different revenue streams in the form of a hybrid model.

Godongwana said Gauteng would also cover the costs of maintaining the 201km and associated interchanges of the roads, while any additional investment in the roads would be funded through either the existing electronic toll infrastructure or new toll plazas, or any other revenue source within their area of responsibility.

In the MTBPS, R23.7 billion was allocated to Sanral to pay off government-guaranteed debt, but this allocation was conditional on a solution to Phase 1 of the GFIP.

Sanral allocations

Sanral general manager for communications and marketing Vusi Mona said on Wednesday the R23.736 billion allocation to Sanral in the Special Appropriation Act of 2022 after the MTBPS was paid in two tranches of about R8.99 billion and R14.756 billion.

The first tranche was used to settle loans and bonds, while the second tranche will be used to settle bonds valued at R9.6 billion due December 2023 and R5.6 billion in December 2024, he said.

Mona confirmed the nominal value of the GFIP debt is R31 billion, but the fair value of the debt is R43 billion.

He said that from June 2022, Sanral has paid R4.696 billion in interest and R9.8 billion in nominal redemptions (R10.8 billion revalued), with the debt servicing coming from the allocated grant and Sanral’s internal toll portfolio cash balance.

The use of the allocation is in line with the set guideline, he said.

Mona highlighted that the agreement reached on the cancellation of e-tolls on the GFIP is between the Gauteng Provincial Government and National Treasury.

“Sanral is not a party to that agreement. Sanral merely provided information as and when requested.

“Therefore, payment of the [Gauteng] share is or will be due to National Treasury,” he said.

E-toll payment rate

Mona said the GFIP e-toll payment rate in Sanral’s 2022/23 financial year was 16.46%, which led to Sanral receiving R589.41 million in income during the financial year from GFIP e-toll payments.

He also provided clarity on when e-toll collections will stop.

“GFIP gantries will be deactivated (stop collection) within two weeks of government gazetting the new legislation or classification. No such gazette has been issued,” he said.

Mona denied the cost of continuing to send GFIP e-toll accounts to motorists constitutes wasteful expenditure in light of the announcement already made about the termination of the scheme.

“It would be wasteful only if the deactivation of the GFIP gantries was formalised via a gazette and the two weeks since gazetting has lapsed,” he said.

What’s with the delay?

Outa criticised the government for the delay in scrapping e-tolls on the GFIP, highlighting that it is a year since the minister of finance promised an end to e-tolls, but motorists in Gauteng “are still grappling with this unjust system”.

The organisation also expressed its dismay with government’s failure to implement its own decision on e-tolls.

“The continued delay in ending the e-tolls system is a betrayal of the trust that citizens have placed in their government.

“Outa calls upon the government to act immediately on its commitment to end e-tolls and deliver the relief it promised,” it said.

ALSO READ: Gauteng e-tolls to be switched off early 2023 – Lesufi

Duvenage said one cannot overlook the administrative costs incurred by the government in extending the e-toll collection contract over the last year and sending bills to thousands of motorists for a system that was ended a year ago.

“These costs represent wasteful expenditure and further underscore the impracticality of e-tolls,” he said.

This article first appeared on Moneyweb and was republished with permission. Read the original article here.