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The Citizen
30-06-2025
- Business
- The Citizen
Gauteng can't pay its e-toll debt — turns to treasury, cap in hand
Is seeking changes to the payment terms, but until then 'will pay'. The fight might be over for motorists, but the debt remains. Picture: Jonathon Rees The Gauteng provincial government is involved in discussions with National Treasury about the payment terms of its R15.9 billion e-toll debt. However, Gauteng MEC of Finance and Economic Development Lebogang Maile stressed on Sunday that the province is committed to sticking to the current Memorandum of Agreement (MoA) arrangements to pay the province's 30% share of the e-toll debt amounting to R12.9 billion – plus interest of R3.3 billion – as it doesn't as yet have an agreement with Minister of Finance Enoch Godongwana about any changes to the terms of the MoA. Maile said the government is having discussions with Treasury on the payment terms to alleviate financial pressure on the province – 'and to give us some additional resources that we can use immediately to deal with immediate social challenges'. In terms of the MoA between the SA National Roads Agency (Sanral), the National Department of Transport, Treasury and the government announced by Godongwana during his 2022 Medium-Term Budget Policy Statement (MTBPS), Gauteng's e-toll debt contribution would be made in five equal annual instalments at government's five-year interest rate. ALSO READ: Gauteng pays R5.44 billion e-toll debt amid budget constraints Province to pay R5.47bn on Monday In addition to the settlement of this debt, the government also made a commitment to contribute a total of R4.1 billion towards the backlog maintenance on the Gauteng Freeway Improvement Project (GFIP). Maile said the province will on 30 June 2025 honour its obligation by paying the second instalment of its 30% portion of the e-toll historical debt. He added that the government made the first instalment amounting to R3.8 billion on 30 September 2024, which comprised R3.2 billion of historical debt and the GFIP maintenance backlog portion of R546 million. Maile said there is currently R3.559 billion outstanding from its commitment to pay Sanral R4.1 billion and that in addition to the e-toll debt payment, the government will on Monday also transfer an amount of R2.099 billion as part of the contribution towards the backlog of rehabilitation to restore the GFIP freeways to an acceptable condition before Sanral resumes its obligations for all future maintenance funded by the national fiscus. The total amount the provincial government will be transferring to Treasury on Monday is R5.47 billion. ALSO READ: Sanral claim for e-tolls doomed Repayments affect service delivery A pothole on a road in Atholl, Johannesburg. Image: Leon Sadiki/Bloomberg Maile said the province could have used that money to build additional schools, hospitals and roads and added if the province was not paying this R5.4 billion, it could for example be announcing that it is 'giving R2 billion to deal with all the potholes, R1 billion to deal with the robots'. 'In the budget, we only announced R300 million to deal with potholes on all provincial roads. It's not going to be enough,' he said. 'The repayment does have an impact on service delivery because it means we have limited resources. For instance, we need about 200 new schools in Gauteng. The money we have is for 18 schools. On average to build a school, is R200 million. 'If this R4.5 billion, or R20 billion over a period of time, was available it would mean we could increase the number of schools we can build … the number of clinics we can build, it means we can improve the quality of services.' ALSO READ: Right step to sort out e-toll debt mess Treasury paying 70% of e-toll debt Maile said there are some financial difficulties that put a strain on the province, which is why it is asking Treasury to help. 'National Treasury is committed to help, which is why it is paying 70% of the historical e-toll debt and the Gauteng provincial government is paying 30%,' he said. He added that the provincial government will over the next few years have to allocate a substantial amount of funds each year to service the repayment obligations for e-tolls – and that this will be happening in a constrained fiscal environment, details of which the province expressed in the initial Budget Speech and reiterated when it retabled its budget for the 2025/26 financial year. 'The reality of the situation is that the funding envelope is stretched by existing allocations, particularly in terms of keeping critical social programmes in health and education funded.' 'Nevertheless, we reaffirm our commitment to the residents of Gauteng that the servicing of the e-toll debt will not compromise our priorities, particularly in relation to social services such as health and education,' he said. ALSO READ: No refunds for those who paid for e-tolls, says Gauteng finance MEC Maile 'Measures and reforms' Maile said the provincial government is implementing various measures and reforms to ensure the sustainability of its fiscal environment. These include active debt management strategies, spending restraint, improving compliance with rules and regulations in supply chain management, as well as revenue enhancement. Maile said the province's revenue enhancement strategy has already been actualised, with provincial departments implementing various strategies to enhance revenue collection. He said this strategy is underpinned by five principles: Accelerating the completion of interventions that have already started; Optimising the existing revenue sources; Enhancing revenue collection processes and systems to increase efficiency, cost-effectiveness, and eliminate leakages; Identifying potential new revenue sources that have not been explored; and The use of alternative funding and implementation models to achieve more value. ALSO READ: E-tolls scrapped, but gantries will remain operational – Chikunga Maintenance, upgrades and capacity expansions projects In terms of the MoA, Maile said Sanral cannot use the funds it receives from the province for any other purpose than the nine projects that are financed by the province. He said the R4.1 billion will be used for the following maintenance, upgrades and capacity expansions projects on 185 kilometres on the N1, N3, N12, N14 and R21: 14th Avenue to Buccleuch Golden Highway to 14th Avenue Buccleuch to Brakfontein Brakfontein to Scientia Heidelberg Road to Geldenhuys Geldenhuys to Buccleuch Uncle Charlie's to Elands Gillooly's to Tom Jones, and Olifantsfontein to Hans Strydom. ALSO READ: E-tolls: Gauteng government to make first debt payment in September – Maile GFIP projects will be complete in four years These freeways are vital for facilitating efficient transportation and supporting economic activity by providing high-speed, controlled-access routes for vehicles in the broader Gauteng city region, Maile said. Gauteng deputy director-general for sustainable fiscal resources management Mncedisi Vilakazi noted that the estimated time to complete the nine projects is four years and that the amounts the province pays and contributes each year fluctuates in line with the readiness of these projects, which are at different stages. 'It will take four years to completely exhaust the nine projects, which will amount to about R4.1 billion,' said Vilakazi. Gauteng's freeways need an update. Image: Moneyweb This article was republished from Moneyweb. Read the original here.
The Citizen
14-05-2025
- Business
- The Citizen
Gauteng's ‘debt collector' move against the RAF and Compensation Fund
Province also 'not necessarily' expecting an adverse AG audit opinion because of its commitment to pay R4.1bn for GFIP maintenance backlog. The province is looking into other income streams to pay the e-toll debt and GFIP maintenance backlog, including liquor licences, gambling taxes, and advertising. Picture: Moneyweb The Gauteng provincial government is appointing 'debt collectors' to put systems in place to ensure the payment of the medical costs of road accident victims and injured workers at public hospitals in the province by the Road Accident Fund (RAF) and the Compensation Fund. 'Unfortunately, for the last few years, because of inefficient systems, we have not been collecting that money,' said Gauteng MEC for Finance and Economic Development Lebogang Maile on Monday. 'It's a lot of money. We need it for our revenue,' he said. Maile said last year that the RAF claims alone amount to about R10 billion. ALSO READ: Gauteng aims to use RAF medical expenses claims to pay e-toll debt Province has not started paying e-toll maintenance bill Maile further said he does 'not necessarily' expect an adverse audit opinion from the Auditor-General (AG) because of the province's commitment to pay R4.1 billion for maintenance backlogs on the Gauteng Freeway Improvement Project (GFIP), which is not owned by the province but is a South African National Roads Agency (Sanral) asset. Maile confirmed to Moneyweb in October 2024 that the proceeds of the RAF public hospital claims are one of the income streams to pay for the province's almost R20 billion e-toll-related debt and GFIP road maintenance financial commitments. He said on Monday that the Gauteng government has not yet paid any of the R4.1 billion it committed to pay towards the GFIP maintenance backlog because the province is still engaged in 'a process' with National Treasury about this payment. Maile said once that process is concluded, the province will be able to explain to the public that it is 'on course in ensuring that we meet our commitments'. ALSO READ: R25.5 billion deficit over five years — Can RAF afford to pay out claims? His comment about not making any payments yet towards the R4.1 billion GFIP maintenance backlog is at odds with statements made in September 2024. Maile said then that the provincial government is starting the process of servicing the historical e-toll debt of R12.9 billion in five equal annual instalments at the government's five-year interest rate. He added at the time that the first instalment the province was paying on 30 September 2024 amounted to R3.8 billion, consisting of R3.2 billion in historical debt and the maintenance portion of R546 million. In terms of the memorandum of agreement signed between the Gauteng provincial government, National Treasury, the Department of Transport, and Sanral: Gauteng agreed to pay 30% of Sanral's R43 billion e-toll debt and interest obligations, which amounts to R12.93 billion; Gauteng further agreed to contribute R4.1 billion to the maintenance backlog on the GFIP; and National Treasury agreed to cover the remaining 70% of Sanral's e-toll debt and interest obligations. E-tolls on the GFIP were scrapped effective 11 April 2024 when the connection to the GFIP gantries was disconnected. ALSO READ: RAF/Discovery judgement: the RAF did not 'win' – experts MEC doesn't foresee problems with AG audit Maile said on Monday the province has not yet engaged the AG about its commitment to pay R4.1 billion towards the road maintenance backlog on the GFIP, but this will happen once the process with National Treasury is concluded. He said he did not necessarily see the payment of R4.1 billion towards assets the province did not own creating problems with the AG's audit, 'because our residents are using these roads'. 'It's not like we just are giving [away] our money. We are paying on behalf of the citizens,' he said. Organisation Undoing Tax Abuse (Outa) CEO Wayne Duvenage said on Tuesday it does not make sense for Gauteng to pay for maintenance on assets it does not own. Duvenage said Gauteng has roads that are in its jurisdiction and are its assets, and Johannesburg has its roads, 'and they normally stick to that'. 'Why then don't they [Gauteng] fix City of Joburg and Ekurhuleni potholes while they are about it? There are also Gauteng citizens riding on those roads,' he said. RAF head of corporate communications McIntosh Polela confirmed last year that claims from the state, including the Gauteng provincial government, are nothing new and 'it is something that has always been happening and is currently ongoing'. ALSO READ: Compensation Fund missing documents for 25 000 pensioners Maile said on Monday that the province has not engaged directly with the RAF over the planned claims against the fund and does not anticipate any payment problems when it submits its claims because the law dictates that the RAF and the Compensation Fund must pay. 'All that is required is that person X was there. The onus … the ball is in our court to prove that patient X came through [the hospital] and the RAF must pay,' he said. Maile said other income streams the province has identified to pay the e-toll debt and GFIP maintenance backlog include liquor licences, gambling taxes, advertising, and the commercialisation of some of the province's buildings and land. 'We have actually started a process now through one of our agencies to call for businesses who have ideas on what revenue streams we can get,' he said. This article was republished from Moneyweb. Read the original here.
