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Stuff from Johannesburg

Will Covid-19 also be fatal to e-tolls?

OUTA believes reduced lockdown traffic means State bailout will be required to finance defunct e-toll scheme’s operational costs

The Organisation Undoing Tax Abuse (OUTA) says the reduction in traffic on Gauteng roads due to the Covid-19 lockdown could very well mean that ETC, the e-toll collection operator, will receive funds from Sanral (ultimately taxpayers) to pay for salaries and other running costs of the unsustainable e-toll collection system.

Over the past few years the e-toll system, and its collection operator Electronic Tolling Company (ETC), has collected less than half the revenue they were contracted to. This is the result of the successful citizen defiance campaign against the unpopular and irrational e-toll system. Gauteng’s e-toll system generated approximately R55m per month before the Covid-19 lockdown – just enough to cover ETC’s operating expenses, which meant that virtually nothing was left to offset SANRAL’s bond repayments.

“OUTA estimates that e-toll collections have probably dropped to between R10m and R15m at most for the month of April, which means that Sanral’s income from the Gauteng e-toll scheme will be well below the amount that ETC’s requires to manage the scheme,” says Wayne Duvenage, OUTA’s CEO. “This means that for the first time since the scheme has been operating, ETC will either have to dig into reserves to pay their salaries and other costs, or Sanral will have to pump money into the defunct e-toll scheme to bail it out. In effect that means that taxpayers will have to pay to keep e-tolls alive.”

OUTA believes the decision to finally pull the plug on the failed e-toll scheme is now long overdue, and hopefully, with toll collections now below the ETC operations costs, the final decision to scrap the scheme is imminent. Sunk costs and political unwillingness have hampered the rational choice to do away with this system for far too long, and this unprecedented situation awakens us from the deep sleep of unconditional payment for services that are supposed to be funded by existing taxes.

“What Government now needs to do, is introduce a plan to restructure the GFIP Bonds of R21bn. This couldn’t have come at a worse time for the state, but is minimal in the greater scheme of challenges we face today. To continue to run the ETC toll collections scheme after all these years of failure, is merely throwing good money after bad,” says Duvenage.

The macroeconomic impact of Covid19 and consecutive sovereign credit downgrades means that we can no longer spend money on programmes and systems that simply don’t work. We foresee a serious decline in the purchasing power of ordinary people in the country’s economic hub, and the debt incurred by the Gauteng Freeway Improvement Project will not be funded by empty pockets.

We trust the Minister of Finance will soon pronounce the fateful and final blow to the e-toll scheme, bringing much needed financial relief to the handful of businesses and people who continue to make up the 20% of road-users who pay their e-tolls.

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Top Star Drive-In: Destroyed by What Created it

However, the very thing that created the Top Star eventually destroyed it. Because the early miners had used crude methods, the Ferreira Dump—and dozens of others like it—still contained significant traces of gold. As the price of gold rose and new chemical extraction technologies (like the carbon-in-pulp process) made it profitable to “mine the waste,” the ground beneath the Top Star became more valuable than the cinema itself. In 2006, despite fierce opposition from heritage groups who argued that the dump and the drive-in were culturally significant landmarks, the projectors were turned off for the last time.

The reclamation of the dump was a staggering industrial feat. Starting in 2008, mining giant DRDGold used high-pressure water cannons to “monitor” the dump, turning 5 million tons of solid earth back into a liquid slurry. This slurry was then piped 40 kilometers across the province to a processing plant in Brakpan. By 2011, the “mountain” had completely vanished. The 50-meter-high plateau that had dominated the southern skyline for a century was reduced to a flat, dusty crater.

The disappearance of the Top Star is a poignant symbol of Johannesburg’s “extractive” nature. It is a city that consumes itself to stay alive; even its historical landmarks are subject to the fluctuating price of minerals on the London and New York stock exchanges. Today, if you drive along the M2, there is an empty space in the sky where the Top Star used to be. While the reclamation removed a source of toxic dust and “acid mine drainage,” it also erased a piece of the city’s collective memory. The land where the gold-flecked mountain once stood is now being rehabilitated for light industrial use, proving that in eGoli, even the horizon is for sale if there’s enough gold hidden inside it.