[UPDATE as at 3:10pm: Sanral has issued a response to Outa’s claims, saying it’s calculations are skewed. Read the full text at the bottom of this article]

Over 70% of the money that comes Sanral’s way from etolls fees eventually ends up paying the foreign-owned Etolls Collection Company (ETC).

This is according to Outa, which has deduced that of the R2.9 billion etolls income received from motorists since inception in December 2013 to March 2017, the Austrian-owned etoll collection company ETC was paid R2.2 billion (74%).

Outa said this  is a clear indication of how irrational the scheme has become and the fact that payment of etolls is very low, makes matters worse.

“This is clearly a problem for Sanral and explains why their bond auctions are not attracting any investors, pushing this state-owned entity to the brink of financial failure,” Outa said.

“Our assessment of Sanral’s latest reporting, indicates they are not accounting for etoll revenues billed at the punitive tariffs, but instead are reflecting their invoicing and outstanding revenues at the discounted etag rates,” said Wayne Duvenage, Outa Chairperson.

According to Outa reflecting all etolls invoices at the discounted rate suggests Sanral wants to present outstanding debt lower, despite the fact that they are reflecting the outstanding debt to unregistered road users at the higher punitive tariff.

Outa added that at the discounted value, Sanral will still be owed around R9.2 billion as of the end of March 2017.

Outa has filed its paper for the litigation process in response to Sanral’s declarations against its members.

“We believe our cases are all extremely strong. Not only are Sanral going to be faced with a tough challenge when it comes to defending the lawfulness of the e-toll decision on constitutional grounds, but we have also uncovered numerous failures when it comes to billing errors and processes within the scheme,” Duvenage said.

Sanral response

Outa is focusing on the cash collected and that skews their calculation. The non-payment of toll cannot be used as the basis on which to determine the cost of collection, as the current ongoing litigation will determine the ability to realise the revenue.

In terms of the previously reported revenue, the toll operation costs are still aligned with the 17% anticipated cost of collection. Unfortunately, toll collection is impeded as a result of Outa and others’ relentless campaign encouraging non-payment of e-toll, which is unlawful.

The toll operations company does not get a percentage of the toll revenue collected but is compensated in terms of a tendered schedule of rates for services delivered. The exact amount paid by SANRAL per month differs depending on services provided.

ETC is a South African company. The monthly payment made is dependent on the services delivered and the direct costs for print and post of invoices, municipal rates and taxes, system and infrastructure maintenance costs and other toll operations costs. Statements made that revenue has or will leave the country have been addressed many times in the past. There is a vast difference between revenue (turnover) and profit. The amount paid to ETC is compensation for services delivered in accordance with tendered tariffs. All operational costs are paid within South Africa; costs such as employee costs, administration costs, communication costs, banking fees, facilities (including maintenance and asset refresh), rates and taxes. All these are paid in the country to local service providers. Only if a profit is made, is there a possibility that it may leave the country, subject to Reserve Bank requirements and Tax Regulations. This is the case with any foreign company doing business in SA.

As to statements that “virtually no money is going toward the e-toll bonds and that SANRAL bond auctions are not attracting any investors” the facts are that at our last bond auction, on 14 September 2016, we received total bids of more than R1. 7 billion whilst we were looking to raise R500 million. This means we were more than three times oversubscribed. This has meant that we did not have to go to market. We have postponed some of this year’s bond auctions due to changes in cabinet and sovereign credit downgrades. Our next bond auction is confirmed for 21 June 2017.

However, it is concerning that OUTA appears to relish in the current situation that SANRAL finds itself in at the moment.  Despite all their efforts in the past, the courts have found that the project was implemented legally. OUTA’s current campaign is based on encouraging road users to break the law. This is unlawful and SANRAL is confident that the current matters before the courts will find this to be the case. Road users follow OUTA’s advice, at their peril.  Furthermore, the National Road infrastructure provided and maintained by SANRAL carries the bulk of freight traffic in the country and is servicing the people of South Africa.  If SANRAL fails, the users of the network will be in a much worse position, as will the economy of South Africa.

In addition, the expansion and improvement of the inner-highways in Gauteng has reduced the congestion and cut drive-times considerably. There are more benefits: for individuals – lower fuel and time costs as well as accident rates and, over time, savings in tyre, suspension and steering repair costs. The same holds for businesses – more turnarounds per day resulting in higher turnover and productivity as well as more appointments per day. These changes, an increase in mobility, ease of use for commuters and business, a decrease in the frustration felt by motorists by cutting down their travel time and helping to ensure their safety as a result of a quality road network are the main drivers behind projects like the Gauteng Freeway Improvement Project. For the last four years commuters in Gauteng have reaped the benefits of this project and while we may continue to disagree on many things surrounding the Project, the one thing I think we can all agree on is that it has already helped to improve the lives of Gauteng citizens, and that, we must not forget, was the entire point of this exercise.

Most of the upgraded freeways will reach their capacity within the next 3 to 5 years, due to exponential growth experienced.  It is anticipated that traffic conditions will then be similar or worse than before the implementation of the GFIP in 2008.  This is also reflected in the SANRAL traffic modelling for the GFIP, that was done in 2008.  SANRAL plans its projects well in advance, based on extensive traffic modelling, travel demand patterns, and also informed by city planning and urban development. The Gauteng Freeway Improvement Project was a three-phase project to be developed using a sustainable revenue stream through the user pay principle to fast-track the much-needed initial existing freeway upgrades that was required to stimulate economic growth, as well as future phases that included the construction of new freeways.  With insufficient funding available to SANRAL, phases two and three are unlikely to be implemented. Most of SANRAL’s national road network in Gauteng was upgraded to its maximum capacity.

Sincerely,

Vusi Mona

General Manager Communications: SANRAL