Gauteng govt pays first R3.8 bn installment towards e-toll debt

Speaking at a press briefing in Sandton, Finance and Economic Development MEC Lebogang Maile gave an update on the province’s plans to pay its 30% contribution towards the South African National Roads Agency (Sanral) debt, while the National treasury is set to cover the remaining 70%.

The controversial tolling system was scrapped in April this year, following persistent challenges and public resistance since its inception in 2013.

Maile confirmed the first R3.8 billion has been paid.

“The Gauteng provincial government is starting the process to service the historical debt of R12.9 billion in five equal annual installments, at a government five-year interest rate. The first installment that we are paying today amounts to R3.8 billion, and the head of the department told me that the money is already in the account, so we have processed it.”

This comes as provincial governments across the country warn that stringent budget cuts will adversely affect social services such as education and health care.

“The province will need to allocate a substantial amount of funds each year for the next five years to meet the repayment obligations. As a result, we are working with revenue-collecting departments to identify alternative sources of revenue to ensure that frontline services remain uncompromised while safeguarding essential social services for vulnerable members of society and maintaining the provision of basic services in the province,’ he said.

The MEC also assured residents the provincial government is not borrowing money to settle the debt, nor is it willing to compromise on the quality of public services.

But he said borrowing is not completely off the cards.

“We don’t want to borrow money to pay the debt. It’s a matter of principle. But it doesn’t mean that we won’t borrow in the future; that’s an option. But if we borrow, the question is what will we be borrowing for?”

Maile said the provincial government stands to spend an estimated R20 billion that will be budgeted for.

“As we budget every year, you will see the figure on the e-tolls. What we are paying is more than R12.9 billion because there is the maintenance of roads that’s about R4.1 billion that we’re not talking about, and the interest over the next five years is calculated at R4 billion. So, we will lose about R20 billion.”

Maile warned that the user-pay principle remains relevant, and one of the lessons from the e-toll saga was that there needs to be public consultation. He says servicing the debt is phase one of a three-part road maintenance and network expansion plan.