OUTA calls for explanation of Sanral and GFIP debt

Before the bailouts are passed by Parliament, OUTA would like to know how the GFIP debt increased to the extent it did

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25/11/2022 06:45:00

.Image: OUTA

OUTA calls for explanation of Sanral and GFIP debt

OUTA’s submission to Parliament on the Medium-Term Budget Policy Statement (MTBPS 2022) calls for an explanation of the South African National Roads Agency Ltd (Sanral) debt and the Gauteng Freeway Improvement Project (GFIP) portion of this.

While we would have preferred that government had not embarked on the costly exercise of implementing e-toll infrastructure in the first place, which would have negated the exorbitant amounts paid to the collection agency, we welcome the resolution of this matter and the acknowledgement that Gauteng commuter roads (social infrastructure) should be funded by the fiscus.

However, we would like improved transparency and clarity on these finances before the Sanral bailouts are finalised.

OUTA’s submission is to the Standing and Select Committees on Appropriations, on the 2022 Adjustments Appropriation Bill and the 2022 Special Appropriation Bill.

The Adjustments Appropriation Bill includes a transfer of R3.740 billion for Sanral for the GFIP, which was transferred to Sanral in July 2022 and is now being regularised, and a proposed transfer of R23.736 billion through the Special Appropriation Bill. The national government has indicated it will pay off 70% of Sanral’s debt and Gauteng will pay off 30%, plus pay for ongoing maintenance of the GFIP roads, effectively ending the e-tolls collection mechanism in Gauteng. Gauteng has since said it is paying off 30% of the GFIP debt (not the full Sanral debt) and calculates its share as R12.9 billion.

In our submission, we note the cost of the GFIP upgrade was R20 billion and that Sanral borrowed R20 billion to fund this. We also note that since 2011/12, national government has authorised government grants totalling R30.053 billion to Sanral, explicitly for the GFIP (this includes the R3.740 billion transferred in July 2022 but excludes the proposed R23.736 billion transfer). However, the GFIP debt remains inexplicably high, as National Treasury said this was R43.031 billion in March 2022.

Comment on other aspects of the MTBPS

The 2022 Medium Term Budget Policy Statement (MTBPS) does not seem to be sufficiently concerned about the stagnant economy, the effect of natural disasters, deteriorating infrastructure and the state’s reluctance to deal robustly with maladministration and corruption. We believe it is important that considerable and extra resources are allocated to the National Prosecuting Authority in 2023 to ensure that entrenched corruption is prosecuted and eradicated.

We raise concern about the bailouts of state-owned entities (SOEs) which are collapsing primarily because of state capture and mismanagement. This is the cost of failing to address these issues through effective oversight, good governance and law enforcement. Once again, it is social spending which is cut; for example, the shifting of R2.937 billion from Social Development to Public Enterprises to repair flood-damaged infrastructure. 

We are concerned about the state of municipalities, despite the significant resources poured into supporting them through the Department of Cooperative Governance and Traditional Affairs. We believe that Treasury must now introduce mechanisms to halt the allocation of grants to municipalities that continue to misallocate or misspend, and introduce other mechanisms to ensure oversight of effective spend of these grants outside the clutches of municipal management.

We are concerned about the rolling over for the second consecutive year of funds for the Vaal River Pollution Remediation Project, as these funds should have been spent and this raises concern about what is taking place in this project. About 15 million people are dependent on the Vaal River in some way or another so it is imperative that the Vaal River Pollution Remediation Project should be given urgent and immediate attention.

We question the purpose of the Infrastructure Fund when the funds are allocated each year to this but then repeatedly removed from the budget.

More information

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

OUTA's submission to Parliament on MTBPS 2022 (the Adjustment Appropriation Bill and the Special Appropriation Bill) is here and the presentation is here.

OUTA has been opposing the e-tolls for a decade. See more on OUTA's work on e-tolls, including an e-tolls chronology, here.

Help us oppose corruption

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Our work is made possible though donations by our paying supporters.

Join us in working towards a better South Africa by becoming a paying OUTA supporter. 

In 2022, we’re in court challenging the AARTO law, the Karpowership generation licences and SANRAL’s secrecy over toll profits.
We’re also challenging electricity prices and defending South Africa’s water resources.

We want to see South Africa’s tax revenue used for the benefit of all, not a greedy few. 

Any amount welcome.