Gauteng pays first R3bn of whopping R12.9bn debt

While Gauteng MEC of finance Lebogang Maile’s has committed the provincial government to paying its first R3 billion of the R12.9 billion it owes in historical e-toll debt, he has assured Gauteng residents that service delivery won’t be affected, despite the province’s financial challenges.

But no provision has been made to reimburse those who did pay their e-toll accounts.

“When people were paying for e-tolls, remember it was legal, it was not illegal,” said Maile.

“They were paying because they were utilising the service, so they will not be paid back because that money was not collected illegally by the government,” the MEC said.

Maile said the provincial government had made the first step to servicing the R12.9 billion debt.

Outa asks why Gauteng must settle Sanral’s debt

Wayne Duvenage from the Organisation Undoing Tax Abuse (Outa) asked why Gauteng is expected to settle 30% of the South African National Roads Agency’s (Sanral) debt.

This was a major concern as the province’s finances are already strained with recent budget cuts, he said.

“They haven’t explained why they’re settling Sanral’s debt from the Gauteng Freeway Improvement Project.

“This debt isn’t the province’s responsibility. Sanral accumulated this debt, Treasury has been giving it money to fund the improvement project debt, yet Gauteng is spending R4.1 billion on maintaining Sanral’s roads.

“How do you allocate money to an asset that isn’t even on your books?” Duvenage asked.

The first instalment of R3.8 billion, included R3.2 billion for historical debt and R546 million for maintenance, Maile said.

The total debt stands at R45 billion, with Gauteng responsible for R12.9 billion (30%) and the national government covering the remaining 70%.

In April, government shut down the gantries and started to pay off the debt.

The R3.8 billion payment was outlined during the budget plan presented in March and the province is drawing from the provincial revenue fund to meet this obligation, said Gauteng Treasury head Ncumisa Mnyani.

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As much as R20 billion could be spent now

Maile said the province was looking at making payments surpassing R12.9 billion due to road maintenance costs (R4.1 billion) and interest over the next five years, estimated at R4 billion, bringing the total to R20 billion.

Duvenage criticised the provincial government for lacking transparency about how the amount increased.

“They committed to funding something at a national level using provincial money, and now the amount has risen from R17 billion to R20 billion. Where did the extra money come from? They’re not explaining that.

“It’s frustrating that Gauteng’s financial accounting isn’t clear and they aren’t providing enough details about why these amounts keep changing, especially when the province is already financially strained,” he said.

Layton Beard, spokesperson for the Automobile Association, said the e-toll burden now falls on the province.

“There was an obligation and that obligation has now been met. It’s good, but we should never have been in this position in the first place. ”

Maile acknowledged the financial constraints caused by debt and budget cuts, but said service delivery, especially in health and education, remains a priority.

“Gauteng will never be bankrupt. We are facing difficulties due to budget cuts and e-tolls, but we are exploring different ways to enhance our revenue.”

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