Wayne Duvenage: Minister Mbalula still kicking the e-toll can down impasse lane

Wayne Duvenage is the chairman of the Organisation Undoing Tax Abuse (Outa). (Lucky Nxumalo)
Wayne Duvenage is the chairman of the Organisation Undoing Tax Abuse (Outa). (Lucky Nxumalo)

Two months have lapsed since President Ramaphosa’s deadline date of August 31, 2019, for Transport Minister Fikile Mbalula to find a solution to the e-toll impasse in Gauteng, South Africa. And yet the call made by Minister Mbalula this week, urging motorists to pay their e-toll bills, suggests the solution-finding exercise is indeed futile.

Minister Mbalula’s comments have been heard before and it certainly signals government’s reluctance to make a decision to end the failed scheme once and for all. They are simply kicking the can down the road, while millions of rands still pour into the Electronic Tolling Company (ETC)'s coffers each month.

By the end of November 2019, the one-year extension to ETC’s five-year e-toll collection contract - which started on December 3, 2013 - will have expired. What is unknown is whether Sanral has formally extended the contract with ETC for another year (into 2020) and if so, was this approved in accordance with the Public Finance Management Act?

The real issue, however, is government’s inability to feel the e-toll sanity slap that keeps hitting them in the face. With 80% of the public refusing to pay their e-toll bills, there is nothing the authorities can do about it. Nearly eight months ago, South African National Roads Agency (Sanral) threw in the towel on the e-toll test case against OUTA’s supporters, effectively abandoning their need or ability to force e-toll defaulters to pay up.

Adding fuel to Sanral’s e-toll fire was the Credit Bureau Association’s announcement, in March this year, that e-toll defaulters would not be blacklisted or have their credit ratings impacted by e-toll debt, whether Sanral obtained a default judgment or not.

If the intention of collecting e-tolls was to service the (excessive R21bn) bond at around R2.6bn per annum and to cover the collection costs contracted to ETC at a further R1.6bn per annum, they have completely missed the mark by some R3.5bn (or 86%), with their past year’s e-toll revenue amounting to a dismal R688m.

Today, the public have not forgotten about Sanral’s reluctance to claw back some of the overcharged freeway upgrade costs, as exposed by the Competition Commission in 2013.

In fact, economists have agreed with OUTA that the Gauteng Freeway upgrade costs were very excessive. OUTA calculates this odious debt – caused by Sanral’s overpayment to road construction contractors – to be around 100% of what the project should of cost, estimated at around R9bn. Sanral paid R17.8bn.

This grossly overpriced freeway upgrade leaves a bad taste in the Gauteng motorist's mouth. However, it is made worse by the fact that Sanral signed the five-year e-toll collection contract with the Austrian-based ETC at R9.9bn, well above what they told the public was a tender won at R6.2bn. This issue in the absence of a plausible explanation, appears to be nothing short of gross maladministration or corruption.

With all these factors stacked up against Government, one has to ask what it is that prevents the authorities from make a simple decision to end the scheme, especially against the knowledge that Sanral’s five-year contract with ETC has expired.

Sanral will struggle to resurrect the defunct e-toll scheme and with only 20% compliant users. There is no money going to offsetting the bonds or interest costs.

The irrationality of this situation leaves the public to speculate that only two possible reasons exist for this indecisiveness: (1) corruption - whereby connected individuals or suppliers linked to scheme are enjoying some of the revenues trickling into their coffers or (2) government is grossly inept and incapable of making what is a relatively easy decision.

There is another quick option to have the purple gantry lights turned off while government dilly-dallies on the matter, is for a fair portion of the remaining 20% who are keeping the e-toll scheme on life support – more likely out of fear of some imagined retribution by government – to finally pluck up the civil courage and stop feeding the defunct e-toll scheme.

Duvenage is chief executive officer of the Organisation Undoing Tax Abuse (OUTA). Views expressed are his own.

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