The national government has agreed to take over a significant portion of the R47 billion e-tolls debt in a bid to end the impasse over the controversial Gauteng Freeway Improvement Project once and for all after many years.
THE NATIONAL government has agreed to take over a significant portion of the R47 billion e-tolls debt in a bid to end the impasse over the controversial Gauteng Freeway Improvement Project once and for all after many years.
Finance Minister Enoch Godongwana on Wednesday announced that the national government and the Gauteng provincial government had agreed on a 70/30 spilt in the debt owed by the South African National Roads Agency (Sanral) over the e-tolls.
The controversial tolling project has been a thorn in the government’s finances for more than 10 years now, with promises to scrap it experiencing a number of postponements over policy disagreements within the government spheres.
While tabling his Medium-Term Budget Policy Statement (MTBPS) in Parliament on Wednesday, Godongwana said the Gauteng provincial government has agreed to contribute 30% to settling Sanral’s debt and interest obligations.
Godongwana also said the national government will cover the remaining 70% of the debt.
“We need to move on from the debates of previous years and find solutions to this challenge. All we are taking is taking over the debt to make sure Sanral improves its balance sheet,” Godongwana said.
“Gauteng will also cover the costs of maintaining the 201 kilometres and associated interchanges of the roads and any additional investment in road will be funded through either the existing electronic toll infrastructure or new toll plazas, or any other revenue source within their area of responsibility.”
As a result, the government allocated R23.7bn for Sanral to settle maturing debt and debt-related obligations this year, on condition that solution to Phase 1 of the e-tolls project is found.
The MTBPS documents pointed out that Sanral remained in limbo given policy uncertainty over the government’s position on the user-pays principle.
As a result, Sanral cannot collect sufficient cash from its toll portfolio to settle maturing government-guaranteed debt.
This balance sheet weakness is affecting Sanral’s ability to maintain the broader road network and as such also presents a medium-term risk to economic growth.
It remains to be seen whether this is a relief for groups such as the Organisation Undoing Tax Abuse (Outa) which has been campaigning for the scrapping of e-tolls for years.
– BUSINESS REPORT
