The South African National Roads Agency Limited (Sanral) announced this week that they will be scrapping R3.6 billion worth of E-Toll debt.
Yes, this is yet another one of the government’s failed attempts at controlling their citizens. These debts are a result of mass social protest against e-Tolls on roads around South Africa.
Sanral stated that this debt has been collecting over the course of three years. At the end of this financial year, the company explained that any debt owed to them will be scrapped.
But How Does This Work?
Over the years, the E-Toll system has been a subject of contention among many South Africans. Many of them have been completely against the implementation, however E-Tolls went ahead. As of 2014, 19% of all national roads were made into toll roads.
The E-Toll system was founded in order to fund the R20 billion Gauteng Freeway Improvement Project. This highway was completed in 2011 “to free up a lot of congestion on Johannesburg roads”.
According to Organisation Undoing Tax Abuse(Outa), four out of five motorists don’t pay their E-toll bills.
In a previous interview, Outa’s Wayne Duvenage expressed his concern about the current state of the E-Toll system.
“The scheme was well resisted by the public. I think what they’ve done is now written off a substantive amount and they’re bringing down the outstanding debt with the realisation that in time this scheme is not going to work. So I think they’re going to take a couple of years to try and write off the remainder of the debt.”
Why Has It Failed?
With so many South Africans refusing to pay their outstanding E-Toll debt, Duvenage believes that Sanral is headed for failure.
“We believe they’ve written down the punitive tolls down to normal e-tag toll rates and they’ve kept it for the three years and then they ignored all those under R500. That is the first chance of cleaning out, but it is a realisation and acknowledgement that all the charges that we have been charging the public out there are not collectable, we need to start removing it from our books.”
In the past year, Sanral has collected R1.85 billion in E-Tolls from drivers, however this is not enough.
According to the Sanral Act of 1998, criminal procedures may be taken against E-Toll defaulters who haven’t settled their bills.
Outa believes that although the Sanral Act may allow for criminal procedures, this will be more of a nightmare than anything else.
In spite of Sanral’s aim to prosecute people with unpaid bills, any debt older than three years is not considered. This will make it even more difficult for Sanral to find out who hasn’t paid their recent E-Tolls.
Last week, Finance Minister, Malusi Gigaba announced that Sanral’s borrowing has increased in the last two years by R10 billion.
The increase provided enough financial backing to cover 1400km of new roads over the two year period. There is approximately 24 637km of road in the country, and of that, 87% are non-toll roads.
Outa has expressed that over 80% of E-Toll users refuse or just haven’t payed their E-Toll bills. Sanral’s latest report however, shows that their toll revenue is up by 6% to R4.9 billion. In addition to this, the government provided the company with a grant of R8.6 billion. This puts their total revenue at R13.9 billion.
Minister of Transport, Joe Maswanganyi announced that the department, along with Sanral is looking into E-Toll alternatives.
Issued by CompareGuru