Government’s failure to end e-tolls formally means collection contract continues

Sanral extended the e-tolls collection contract twice last year, with one extension probably signed after the October 2022 announcement of the end of e-tolls, and another extension may be underway

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12/06/2023 12:26:14

.Image: OUTA

Government’s failure to end e-tolls formally means collection contract continues

The South African National Roads Agency Ltd (Sanral) signed an extension to the e-tolls collection late last year despite government’s announcement of the end of e-tolls and the huge bailout from the fiscus. The current extension is due to run out in “mid-June”, raising concern that another extension may already have been signed.

OUTA has repeatedly called for finality on the e-toll situation and warned against extending the collection contract.

The Electronic Toll Collection (ETC) e-tolls collection agency is wholly owned by the Austrian company Kapsch TrafficCom AG.

The Kapsch annual and quarterly reports record that its collection contract for Gauteng e-tolls was extended twice during 2022. The first extension was sometime between 1 April to 30 September and the second was likely finalised after the announcement of the end of e-tolls.

OUTA believes that these extensions are irregular and are unnecessary expenses. We call on the Minister of Transport and Sanral to end the collections contract as unnecessary.

The ETC collection contract started on 3 December 2013 when the gantries were switched on and was supposed to be for a maximum of eight years, including extensions, which took it to December 2021. However, Sanral has repeatedly extended it since then without going through a new procurement process, believed to be partly due to the confusion over the future of the scheme.

On 26 October 2022, Minister of Finance Enoch Godongwana announced the end of e-tolls during the Medium-Term Budget Policy Statement (MTBPS). The MTBPS also included two bailouts for the Gauteng Freeway Improvement Project (GFIP): R23.736 billion to Sanral to pay off government-guaranteed debt and another R3.740 billion moved within the Sanral budget from non-toll roads to the GFIP. Despite Minister Godongwana’s announcement, government has failed to formally end e-tolls or explain the debt situation. Ending the e-tolls requires the Minister of Transport to declare the GFIP roads no longer subject to tolls, which has not been done, so motorists continue to be billed.

Government promised that by the end of 2022 – nearly six months ago – the end of e-tolls would be finalised.

“Here we are in June 2023: nothing has changed,” says Wayne Duvenage, OUTA CEO. “Government’s inability to implement its own decisions is at play here. We’ve seen this before, a lot is said and nothing is done.”

The e-toll bills still go out every month and a handful of people pay.

“We call on government to implement the decision they’ve made, once and for all, so we can bring this debacle to an end,” says Duvenage.


The first extension in 2022

In November 2022, the Kapsch report for the first half of 2022/23, for the period 1 April to 30 September 2022, said: “In South Africa, our existing contract for the toll system in the Gauteng province was extended until the beginning of December 2022. It is currently uncertain how the decision to no longer collect tolls in Gauteng will affect us in the medium term… In South Africa, we expect the province of Gauteng to announce soon how it intends to proceed with the toll system.”

It’s not clear when that extension was signed, but the Kapsch annual financial statements 2021/22, for the year to 31 March 2022, indicate that it was likely done in September 2022. “As the local authorities have not yet selected a new operator for the toll system, the existing contract has been extended until mid-September 2022 on the same terms,” said the report.

The second extension in 2022

In the third quarter report, for the period October to December 2022, Kapsch reported the second contract extension that year but did not specify when this was done. “In South Africa, our existing contract for the tolling system in the Gauteng province was recently extended again until mid-June 2023,” said the report. The ETC contract usually links to the original starting date of 3 December 2013, so a contract from mid-December 2022 to mid-June 2023 would indicate a six-month contract. This indicates that this extension was probably signed after the announcement of the end of e-tolls.

The extension to mid-June indicates that another extension may be imminent if not already signed, which OUTA believes is a waste of money.

Kapsch’s annual financial statements for 2022/23 are not yet available.

More information

Read more on OUTA’s e-toll campaign here.

A soundclip with comment by OUTA CEO Wayne Duvenage is here.

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