Tyre collection stalemate
Redisa halts all collections of old rubber, warns of closure if SARS keeps levies
WHEN Wheels asked Hermann Erdmann, CEO at the Recycling and Economic Development Initiative of South Africa (Redisa), in April 2016 how a new tax on tyres would impact the Redisa recycling fee, he had to plead ignorance of government’s intentions.
But this week, Erdmann announced his impatience with the process and said Redisa had to stop collecting old tyres from tyre dealers until government gives clarity on the issue.
This comes after government changed the Redisa funding model, based on the implementation of a tyre levy collected by SARS, effective from February 1, 2017. To date, no one seems to know if the new tyre levy, which was announced in the 2017 national Budget speech, would replace the existing waste management fee of R2,30 per kilogram on every tyre sold, and if not, what other amount government wants to slap on all new tyres sold.
The amounts involved are huge — in 2014 Erdmann told
Wheels the tyre levies to Redisa amounted to R620 million a year, each cent of which was audited by three auditing firms — KPMG, PricewaterhouseCoopers and Ernst and Young.
This week, Erdmann confirmed Redisa had not been allocated any funds post February 1.
“As a result of not having received any funding, and until, and if, government funding has been received, Redisa has no choice but for the time being to cease tyre collections,” Erdmann said.
He emphasised that this was not where Redisa wanted to be. “We informed government in February 2016 that should funding be removed from the industry, wind down would be necessary.
“This financial view was audited by PWC on instruction from government.
“Our understanding from government communications was that this was just a change in funding model but that the industry would be continue to be funded. Redisa is taking every step to secure the funding necessary to reinstate its collections.
“To this end we have notified the Department of Environmental Affairs of the environmental and business ramifications of ceasing collections.
“In the minister of Finance’s Budget Review for 2017, R210 million was allocated to the Waste Bureau for Redisa/ Waste Bureau and we are engaging with the department to secure the allocation which would allow Redisa to resume collections,” added Erdmann.
He is, however, confident that an amicable settlement with government can be reached.
“Our focus is on reaching an agreement that is in the best interest of all parties involved, this includes preserving the jobs and the network created,” said Erdmann.
Redisa has filed papers in court with regards to its position. Meanwhile, all tyre shops and affected persons are advised to contact the Waste Management Bureau at the Department of Environmental Affairs for further information on legally disposing of waste tyres at 012 399 9803, or the DEA call centre at 086 111 2468. — WR.
Until further notice:
• Redisa will no longer collect waste tyres from registered collection points, including micro-collectors; • Redisa depots will remain open but will not be accepting any deliveries; and • Deliveries to processors will continue as scheduled until further notice.