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The South African Roads Agency Limited (SANRAL) financial statements provide a clear signal that the state-owned entity acknowledges that it is finding collecting the Gauteng e-toll debt extremely difficult, says the Organisation Undoing Tax Abuse (OUTA).

It also means that SANRAL is likely to require increased funding from an already over-stretched National Treasury, as the investment houses are very absent at SANRAL's bond auctions.

The most telling sign of SANRAL’s financial woes is the increased loss for the 2016/17 year, at just under R5 billion, substantively up from the loss of R1.2 billion posted last year and with the bulk of the loss (about R4.6 billion) arising from the toll operations.

“However, it is the treatment of the outstanding e-toll debt when compared to last year, that illustrates that SANRAL is starting to face e-toll reality,” says Rudie Heyneke, OUTA’s Transport Portfolio Manager.

SANRAL records impairment losses of R3.6 billion for e-toll debts that were effectively written off, compared to R92 million in 2015/16.

“Last year, virtually no outstanding debt was written off, as SANRAL had pinned its hopes on the 60% discount dispensation gaining traction during the following financial period. This year, the massive R3.6 billion e-toll impairment loss is a significant acknowledgement that the e-toll debt is uncollectable,” says Heyneke.

That R3.6 billion is the equivalent of 50% of all toll revenue (the trade receivables) for the first 15 months of Gauteng e-toll operations and is substantially more than the prescribed debt (the debt older than three years).

SANRAL’s report says it can’t legally write off toll debts but that the amounts assessed as irrecoverable include debt older than three years, losses due to the reduction of the standard tariffs in 2015, accounts under R500 and debt owed by businesses in liquidation or under business rescue.

“The impairment of the outstanding debt, combined with operating losses, is a strong indicator that SANRAL’s leadership, together with the Minister of Transport, must make an in-depth revision of their e-toll policy,” says Heyneke.

Of serious concern is that SANRAL’s Chairperson speaks of having “only” R425 million of irregular expenditure as an achievement, due to the reduction of this figure from the prior year’s R1.2 billion. “While the trend of curbing irregular expenditure may be moving in the right direction, the value is still unacceptably high,” says Heyneke.

E-TOLL COURT CHALLENGE

Although SANRAL’s legal expenses are not defined in its financial statements, OUTA believes that the current legal action against e-toll defaulters is a further waste of taxpayers’ money.  OUTA and SANRAL’s legal teams have been working to bring the first case to court for well over a year now, which indicates SANRAL’s lack of interest in testing the legality of the matter.

OUTA is pleased that the Minister of Transport Joe Maswanganyi acknowledged the challenges SANRAL has had with regards to tolling, especially on the Gauteng Freeway Improvement Project.  He said that he is planning to hold a discussion on road funding with all provinces to take proposals to Government.  OUTA will seek to engage with the authorities on making a decision to eventually can this failed scheme, once and for all.

OUTA is a proudly South African non-profit civil action organisation, comprising of and supported by people who are passionate about holding government accountable and improving the prosperity of South Africa.

Issued by OUTA