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Gauteng to review e-tolls, Sanral ratings outlook changed to stable

David Makhura
Photo by Duane Daws

27th June 2014

By: Natasha Odendaal
Creamer Media Senior Deputy Editor

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Gauteng Premier David Makhura on Friday committed to establishing a panel to review the impact of e-tolls on the province and its citizens.

He announced during his inaugural State of the Province Address that the yet-to-be-established panel would invite proposals on solutions to the highly contested e-tolls. Consultations would also be held with national government, municipalities and all sectors of society.

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“While we shall not promise easy solutions and claim easy victories, we must make it clear that we cannot close our eyes to the cries of sectors of our population who are severely affected by the cost of travelling across the province.

“We must all move from the premise that we need good roads in our province to support economic development. How we finance such infrastructure must be deliberated upon and agreed,” he stated.

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This followed recent statements by Gauteng roads and transport MEC Ismail Vadi suggesting there was still some dissatisfaction with the funding model chosen for the first phase of the Gauteng Freeway Improvement Project (GFIP).

Vadi had claimed that the Gauteng government, despite affirming its stance that e-tolls remained a valid option, would take a second look at e-tolls as a funding source for building highways in the province, with discussions about a provincial fuel levy, a provincial tax or a shadow of shadow tolling under way.

Justice Project South Africa (JPSA) and the Opposition to Urban Tolling Alliance (Outa) “cautiously” welcomed the potential review of the e-tolling system on Gauteng’s freeways but warned that this was not the first panel to re-examine – to no avail – the controversial matter.

“Any review panel can possibly be the first real platform for dialogue … [as long as it is] representative of civil society, [and] not just comprised of a bunch of politicians, bureaucrats and companies whose financial future is dependent on e-tolling continuing,” JPSA national chairperson Howard Dembovsky said in a statement.

A previous inter-Ministerial panel and a 2011 steering committee were deemed “talk shops” that were run by those who had “created the problem in the first place”.

“It is, however, very important that this [panel] does not simply become another co-option tactic that degenerates into a meaningless talk shop. It must be an honest and frank engagement by the authorities to unpack the real issues on the matter,” Outa spokesperson John Clarke added.

The most “obvious and lasting” solution was to scrap urban tolling entirely – a concept dismissed by government – and implement an efficient, ring-fenced and financially inexpensive provincial fuel or roads levy, Dembovsky asserted.

Makhura’s statement coincided with Moody’s Investor Services changing the South African National Roads Agency Limited’s (Sanral’s) ratings outlook from negative to stable.

Sanral CEO Nazir Alli believed the shift highlighted the “significant progress” that had been made in restoring investor confidence, as Moody’s “singled out the success of good e-toll collections” on the GFIP.

Moody’s also affirmed the issuer ratings of the agency of Baa3/P-3 and A3.za/P-2.za.

“The rating affirmation and outlook change is as a result of increased revenue due to e-toll collections – which increased Sanral’s total toll revenue from R2.1-billion at financial year-end 2013 to R3.4-billion for the financial year ended March 2014,” he said.

Moody´s stated that it expected toll revenues to grow to R4.1-billion – of which R1.8-billion would be sourced from the GFIP – by the 2015 financial year.

However, previous reports had indicated that only about 35% of drivers passing under the gantries were paying their e-toll bills and less than 10% of R543-million in unpaid bills had been recovered.

Makhura said he could not promise that the current e-toll system would be abolished and told drivers to continue paying their tolls while the review panel conducted its work.

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