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E-toll halt won’t hurt economy

Economists have dismissed government claims about major repercussions to government finances and damage to the country’s global credit ratings because of the halting of e-tolling on the Gauteng Freeway Improvement Project (GFIP) from Monday.

Community members hold placards during the toll road hearing at the Johannesburg City Hall. Photo: Ziphozonke Lushaba

This follows the North Gauteng High Court granting an urgent temporary interdict on Saturday stopping the SA National Roads Agency Limited (Sanral) from implementing e-tolling. The application was brought by the Opposition to Urban Tolling Alliance, a grouping of largely business and consumer organisations.

Chris Hart, an economist at Investment Solutions, said if the interdict destabilised government expenditure to that extent, then there was “a weakness in government expenditure that they (government) are not telling us about”.

Hart said the delay in implementing e-tolling was not a big deal, stressing it would cost government less than R2 billion a year to service the debt incurred for the GFIP.

This was less than 0.2 percent of total planned government expenditure in this year’s budget, which for the first time exceed R1 trillion.

Goolam Ballim, the chief economist at Standard Bank, said if there was a contractual infringement impacting on Sanral’s ability to pay, it did not imply sovereign default risk and “will not compromise South Africa’s international credit standing in any way”.

He said the claimed damage to credit ratings and government pensioners due to the investments by the Public Investment Corporation in Sanral bonds was “a side issue”.

“It is government guaranteed debt. If Sanral can’t pay it, the government will,” he said.

Hart believed the imposition of an additional fuel levy of 10c a litre would provide the government with sufficient money to service the debt and could be implemented quickly.

Alliance chairman Wayne Duvenage said they were ecstatic and overwhelmed by the court decision.

Duvenage said they worked out that there would have been just under 2 million e-toll transactions a day at an average price of about R3 a transaction, but with more vehicles on the road and inflation, more than R100bn would be raised over 20 years for a road that cost R32bn with interest payments.

“Something is wrong here. If they (Sanral and the government) had applied their minds in terms of what is best for the public, they would never have gone down this road. Sanral has other hidden agendas. It has not been open and transparent and willing to engage and had to be challenged.”

He was “quite hopeful” that the government and Sanral would have second thoughts about implementing e-tolling.

The interdict means the implementation of e-tolling will be delayed for several months until the main application for a review of e-tolling by the alliance was heard and judgment delivered. Cosatu, which reached agreement with the ANC to delay the planned implementation of e-tolling from today by a month, has called for e-tolling to be abandoned.

Raymond Parsons, the deputy chief executive of Business Unity South Africa, said the interdict provided an opportunity to review and revisit the approach to e-tolling and fully address the practical challenges surrounding the implementation of the system.

The Department of Transport said it respected the court decision and would study it thoroughly before deciding on the next course of action.

Treasury chief director of communications Jabulani Sikhakhane said yesterday: “The National Treasury was not an original respondent and it was only very late in the process that the Treasury applied and was admitted as one of the respondents. As per Treasury’s affidavit, Treasury’s main concern was the fiscal impact of any decision regarding e-tolling.”

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