E-TOLL SAGA: IT’S EITHER SANRAL’S WAY OR THE HIGHWAY
THE importance of proper financial controls and debt collecting in the administration of local government was highlighted in the recent report on municipalities by the AuditorGeneral.
His admonition could have been addressed to all public enterprises, as is his direct warning: if poor debt collection, late payment of creditors, maintenance backlogs and poor budget processes are not addressed, these will have a “significantly negative impact” on service delivery.
We at the SA National Roads Agency Limited (Sanral) take this warning to heart, even though a major part is not applicable to us. Sanral is well-known as well-managed, rated as one of the best employers, is corruption-free and consistently gets unqualified audits.
The A-G told municipal management to investigate non-compliance which could “include financial loss through excessive expenditure (uneconomical use of funds), fruitless and wasteful expenditure, lost revenue, failure to recover debt, avoidable penalties and interest” and further on is very clear on “lost revenue, failure to recover debt”.
The latest local government revenue and expenditure report released by Treasury this year indicated municipal consumer debt was R117.9-billion – quite a significant amount of lost revenue especially when taking into account that Treasury said only R22.7-billion of the debt was realistically recoverable.
Lost revenue, failure to recover debt – that is something which touches Sanral directly. Recovering debt, specifically on the inner Gauteng highways, is problematic for a number of reasons, one of which is the ill-directed public campaign by a minority urging people not to pay their e-tolls debts.
This builds on the prevalence among some South Africans to expect services which they do not want to pay for – this includes water, electricity and waste collection.
The A-G gave a possible reason for what he called the “regression” in the financial health status of some municipalities: it can, in part, “be attributed to the poor economic conditions prevailing in the country over the past several years, which are characterised by high consumer debt and resultant debtor default”.
Some perspective is necessary here. The question of affordability is not valid when it comes to e-tolling on the Gauteng highways as it is one which was the subject of an investigation into the whole issue, and its affordability initiated by the premier of Gauteng.
The result was halving of the toll fees, a simplification of the fee structure as well as an extended period in which there was a 60% reduction on historic toll debt. Taking into account that commuters using public transport will still be exempted, the affordability issue has been addressed.
It was abundantly clear from the inquiry that affordability was not, and cannot be, an issue as the latest figures confirm: two-thirds of registered road users pay less than R50 a month, just less than 80% pay R100 while only just over 7% reach the cap of R236. Sanral has made it very clear in the past: if a road user has toll debt and is not paying, there will be legal consequences. Not only is it the right thing to do to pay for services used, but it is necessary if the national roads are to be maintained at the global standards South Africans have become accustomed to. And that is not even mentioning the dire need to construct new roads to underpin and support, in particular, the growing Gauteng economy.
There are two ways to fund the maintenance of existing roads and construction of new additions: through the national budget, which covers 85% of the national network which is not tolled.
But the rest, almost 15%, has to be tolled as there simply is not enough funding available from taxation for these. Public-private partnerships cover just less than 3 000km of the tolled roads, but the 201km in inner Gauteng would not be at the high standards they are in if it had not been for the expected income from e-tolling.
This does not even touch on the vital question on the immediate horizon: the pressing need to build more N1-quality roads in Gauteng to keep the congestion wolves at bay and boost the local economy.
We are acutely aware of this and remain intent on collecting the outstanding debt and to collect the present revenue due to it. It is in line with the admonition from the Auditor-General, and the right thing to do.