End of the road?

4th November 2022

By: Terence Creamer

Creamer Media Editor


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After more than ten years of resistance, several years of defiance and many false starts in finding an acceptable resolution, Finance Minister Enoch Godongwana’s announcement that Sanral’s R47-billion Gauteng Freeway Improvement Project (GFIP) debt is to be transferred to the national and Gauteng governments signalled the end of the road for e-tolls.

To recap, the Minister announced the following: 70%, or R32.9-billion, of the debt would be absorbed by the national government, while Gauteng would take on the 30% balance, or R14.1-billion; the Gauteng provincial administration would assume responsibility for the cost of maintaining the 201 km of highway and associated interchanges, as well as any future investments; and the Gauteng administration would have the power to decide how that maintenance and any future investments would be funded.

He also used his Medium-Term Budget Policy Statement address to announce that government was proposing to make an initial allocation of R23.7-billion to Sanral to support it with its immediate debt commitments and to avoid any risk of default. The money, he added, would be disbursed on strict conditions.

The decision to pursue a debt transfer, as well as to transfer responsibility for the roads back to the province, has been taken to resolve a protracted stand-off over e-tolling, as well as to improve Sanral’s balance sheet in a way that allows it to get back to its core role of building and maintaining roads, primarily national roads. However, the announcement definitely does not signal the end of the road when it comes to resolving how the maintenance and expansion of Gauteng’s road network will be funded.

This is crucial, as the Gauteng network is already reaching its capacity limits but nevertheless remains a key conduit for the movement of goods and people for other provinces, as well as parts of the region. Indeed, in many ways, Godongwana’s announcement is but the start of a journey that could prove treacherous unless well managed.

As Organisation Undoing Tax Abuse (OUTA) CEO Wayne Duvenage highlighted immediately after the speech, the debt solution is but part of the story.

Duvenage, who has led the campaign against e-tolls for over a decade, stressed that ending e-tolls has two aspects: establishing the alternative funding solution for the GFIP, and the legal dismantling of e-tolls. Correctly, therefore, he called on Transport Minister Fikile Mbalula to urgently announce the way forward.

It will also be important, however, for Gauteng to offer visibility of its plans for funding the maintenance and expansion of the province’s highway network, as well as its implementation strategy. This is vital, as any gap in the maintenance programme will have dire consequences, as can be seen in the electricity and water sectors currently.

Failing to follow up the announcement with a credible strategy could turn what is currently a victory for motorists and Gauteng politicians into a defeat for efficient mobility. To be sure, this is an important milestone, but certainly not the end of the road.

Edited by Terence Creamer
Creamer Media Editor



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