Scrapping e-tolls makes economic sense

OUTA denounces claims by Electronic Toll Collection (ETC) that as many as 38 000 potential indirect jobs could be lost should the Gauteng e-toll system be scrapped.

The claims were made by Coenie Vermaak, the CEO of the Austrian-owned ETC which collects tolls on behalf of SANRAL.

ETC employs approximately 1200 staff, yet it sucks around R60 million from Gauteng motorists’ pockets each month to finance an administrative system that has failed to meet its objective of financing a R20bn road upgrade bond.

“What Mr Vermaak is implying is that without e-tolls, neither South Africa nor the Gauteng province is able to build additional road infrastructure to cater for congestion,” says Rudie Heyneke. “South Africa has financed provincial and national roads using Treasury allocations to SANRAL and the provincial administration for decades. To imply that road construction and subsequent jobs will be lost if the e-toll scheme is scrapped is a misleading statement that smacks of sensationalism and desperation.”

ETC fails to mention that it was contracted at R9.9bn to administer the scheme over five years, before any funds flowed to offset the excessive freeway bonds. This equates to an administrative fee of around 61% of the finance costs, which is extremely excessive and would have seen the Austrian-based company being unduly enriched at the expense of the South Africa road user.

“We regard the e-toll scheme as one of Government’s biggest policy blunders since democracy and for ETC to suggest that this scheme will ever achieve its original aim is outrageous,” says Heinrich Volmink, Executive Director of the Organisation Undoing Tax Abuse.

ETC’s e-toll contract has expired and there is no reason to perpetuate its failure any longer. Had OUTA’s suggestion of a 10c addition to the fuel levy been applied from the start, the existing freeway bond would alreaady have been financed and this small addition to the levy could have been used to finance the rest of the upgrades now overdue. Contrast this potential situation with the failed scheme that has only enriched an Austrian company with no provisions made toward the freeway bonds, and you have the reason for scrapping the e-toll schemes as soon as possible.